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American Ag Energy, Inc.

American Ag Energy, Inc.

AAE integrates Combined Heat & Power with high-tech Greenhouses to grow nutritious and pesticide-free produce year-round in the Northeast.

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Deal Type

Equity

Funding Goal

$2,000,000

Current Reservations

$215,000

Minimum Reservation

$5,000

Maximum Reservation

$2,000,000

Deal Stage

Bridge to Series A

Pre-money Valuation

$12,000,000

Open Date

07/03/2018

Closing Date

08/31/2018

Elevator Pitch

CHP integrated w greenhouses to grow fresh produce year-round in Northeast. Proven technology & experienced mgmt. Customers eager to purchase. Environmentally & socially sustainable. Very profitable.

KPIs

46% ROI
8 Employees

Company Overview

American Ag Energy (AAE) is a controlled environment agriculture company that integrates electric power generation with greenhouses to grow vegetables. AAE produces high quality, locally grown, and good tasting vegetables with little environmental impact. The company's technology results in significant energy and water savings and generates important economic advantages. Ag Energy's staff consists of experienced growers, engineers, and scientists who have successfully managed similar activities in the past. AAE's efforts are restricted to the Northeastern United States where 95% of the vegetables consumed are imported. The company delivers its products to its customers the day after they are picked ensuring good taste and high nutritional value. AAE expects to develop a number of these projects in its market area and anticipates building approximately 400 acres over the next 5 to 7 years. These efforts are expected to lead to significant revenues and cash flow.

Traction

  • Developed understanding with major customer for long term purchase of vegetables

    June, 2018
  • Recruited and trained a complete management team

    December, 2017
  • Completed engineering design of the Controlled Environment Agriculture facility

    August, 2017
  • Secured Senior Lender Commitment for $33.25M

    July, 2017
  • Completed all required permits for the project construction

    July, 2017

Pitch Deck

Press Mentions

Key Customers & Partners

Deforche Construct NV (Greenhouse Builder) Jenbacher GmbH & Co. OHG (Power Plant Supplie

Previous Funding

  • $1,908,746 Equity
  • Raise Source: Self
  • June 2018
  • $60,000 Equity
  • Raise Source: Investors
  • September 2017
  • $734,450 Debt
  • Raise Source: Investors
  • March 2017
  • $725,379 Equity
  • Raise Source: Investors
  • August 2013

Frequently Asked Questions

How is Combined Heat and Power integrated with Greenhouses?

CHP is an integrated energy system that reduces total energy requirements by approximately 50%. In so doing, it generates electricity at low cost that is used to extend day length enhancing yields by about 40%. The produced carbon dioxide is sequestered back into the greenhouse enhancing yields by an additional 30%. The heating requirements of the greenhouse is satisfied by using the waste heat produced during the electricity production, resulting in a significant reduction in operating expenses.

Where does the irrigation water come from?

Rain and snowfall are collected from the roofs of the greenhouses and stored in ponds adjacent to the greenhouses. The snowfall is turned into snow melt by heating the roofs of the greenhouses during the winter. After use in the greenhouse, the irrigation water is purified and recycled. This results in a 90% reduction in water consumption when compared to field grown agriculture.

What is an Opportunity Zone?

An Opportunity Zone is a community where new investments, under certain conditions, may be eligible for preferential tax treatment. Investors pay no capital gains tax if the investment is held for 10 years or until 2026, whichever is earlier.

Risks & Disclosures

Euro to Dollar Exchange Rate Risk

Fluctuations in the Euro relative to the Dollar affect project construction costs which are a significant of proportion of project investment.

Financing Risk

There can be no assurance that the Berlin, NH project equity will be secured.

Market Change Risk

Produce prices, purchase terms, and tastes may vary from time to time. American Ag Energy can shift salad types with 30 days notice, and tomato types with 90 days notice. These changes may require the use of different varieties or climate conditions within the greenhouse, which American Ag Energy can achieve using temperature and humidity divisions.

Insect and Disease Control

The operation of greenhouses demands vigilance with respect to insects and disease. American Ag Energy employs an entomologist to supervise the maintenance of a high-quality environment in the greenhouses, free of insect pests. Because insects are always present, this activity focuses upon early detection of insect colonies and the rapid introduction of predatory insect species to avoid the need for pesticides. The Company employs a sophisticated computer system which continuously monitors temperature and humidity in the greenhouses in order to control the outbreak of disease. Ag Energy would, in the event of such an outbreak, employ natural agents, the record of use for which is successful. These agents are certified for the organic production of vegetables.

Production Interference Risk

Greenhouses can be affected by a variety of weather risks. These are controlled by proper design, operation, and for low probability events for which such options are available, by insurances. These include storm damage and business interruption insurances. In the climate in which Ag Energy operates, snow loads represent a threat to greenhouse structures. Ag Energy mitigates this risk with proper structural design, and by the location of heating pipes in the greenhouse roofs to melt snow. Because snow is continuously melted, accumulation on greenhouse roofs is controlled, reducing structural risk to the facility and protecting the working staff. Ag Energy recovers rainwater and snowmelt from its greenhouse roofs, and employs this clean water for hydroponic production of produce.

Documents

Confidential

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