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VIRIDIS ENERGY INC.INVESTOR PRESENTATION
July 2010
Certain statements in this presentation are forward-looking statements, which reflect the expectations of management regarding the Company’s future operations. Forward-looking statements consist of statements that are not purely historical, including any statements regarding beliefs, plans, expectations or intentions regarding the future. Such
statements are subject to risks and uncertainties that may cause actual results, performance or developments to differ materially from those contained in the statements. No assurance can be given that any of the events anticipated by the
forward-looking statements will occur or, if they do occur, what benefits the Company will obtain from them.
These forward-looking statements reflect management’s current views and are based on certain expectations, estimates and assumptions which may prove to be incorrect. A number of risks and uncertainties could cause our actual results to differ materially from those expressed or implied by the forward-looking statements, including: (1) a continued downturn in general economic conditions in North America and internationally, (2) the inherent uncertainties associated with the
demand for biofuels, (3) the risk that the Company does not execute its business plan, (4) inability to finance operations and growth (5) inability to retain key management and employees, (6) ; an increase in the number of competitors with
larger resources, and (7) other factors beyond the Company’s control. These forward-looking statements are made as of the date of this news release and the Company intends to update such forward looking information in the Company's
MD&A in the event that actual results differ materially from such forward-looking statements contained herein. Additional information about these and other assumptions, risks and uncertainties are set out in the “Risks and Uncertainties”
section in the Company’s MD&A filed with Canadian security regulators. 2009
Safe Harbour Statement2
Viridis Company Overview
Cleantech Bioenergy Company with Rapid Growth Premium Softwood Pellet Manufacturer & Distributor Now Vertically Integrating into Production
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FY 2007 FY 2008 FY 2009 CY 2010 - Estimate*
$1,217,000$2,347,000
$6,168,000
$13,800,000Revenue Growth
Viridis Acquisition News4
For Immediate Release
Viridis Energy Inc. Closes Acquisition of Westwood Fibre Products Inc.
June 7, 2010– Vancouver, B.C. Viridis Energy (TSXV: VRD) announced today it has completed the acquisition of Westwood Fibre Products Inc. ("Westwood"), previously announced on March 22, 2010. Viridis has acquired all of the outstanding shares of Westwood shares from 1083631 Alberta Ltd., the sole shareholder of Westwood. The effective date of the transaction is April 30, 2010.
Westwood is a private company engaged primarily in the business of manufacturing wood pellets and bagged animal bedding shavings. It produces approximately 50,000 tons of packaged wood pellets per year including Okanagan Pellets™. The Okanagan brand is one of the leading premium brands of softwood pellets in the market, presently distributed by Cypress Pacific Marketing, a Viridis Energy Inc.
“We are delighted with the completion of this transaction. We are now focused on merging the businesses, which are highly synergistic, both in the short term and long term. Cypress has been successfully marketing and distributing the high end pellets produced by Westwood for several years. Viridis’ long term goal of being a leading manufacturer and distributor of alternative energy products is further solidified by this acquisition.” says Chris Robertson, chief executive officer of Viridis Energy.
Viridis Acquisition News5
For Immediate Release
Viridis Energy Inc. Announces Acquisition of Monte Lake Forest Products
April 9, 2010 – Vancouver, B.C. Viridis Energy (TSXV: VRD) announced today that it has entered into a binding letter of intent to acquire 100% of the outstanding shares of Monte Lake Forest Products Ltd.. ("Monte Lake"), in consideration for 4 million common shares and the assumption of certain liabilities . Viridis has offered to buy and the shareholders of Monte Lake have agreed to sell 100% of the issued and outstanding shares of Monte Lake. In consideration, Viridis will issue 4,000,000 fully paid-up, non-assessable shares from treasury to the Monte Lake shareholders.
Located in British Columbia, Monte Lake is a private company engaged primarily in the business of manufacturing treated post and rails and general logging operations. The acquisition will include timber licenses; land with power and rail transport infrastructure to enable the construction of a new wood pellet mill, which management anticipates will significantly increase Viridis' capacity for ongoing sales. The Monte Lake acquisition is an integral part of Viridis’ plan to expand its business through strategic partnerships and acquisitions.
Vertical Integration Business Model6
Distribution
• One of the largest distributors in N.A.
• Over 250 customers, 15,000 stores
• 260% growth from 2008 to 2009
• Strong logistics, distribution expertise
Manufacturing
• 60,000 ton capacity plant in B.C.
• Multiple fiber contracts in place
• Manufacturer of top brand of pellets
• Fully automated
Manufacturing
• Present fiber supply for pellets
• Site of new chipper & pellet mill for bulk pellet supply
• Capacity up to 150,000 tons storage & CN Rail Loading
Vertical Integration Business Model7
Distribution ModelSale to Dealers $235
Cost of Freight $75
Cost of Pellets $125
Margin 15%
Manufacturing ModelSale to Distributor $125
Cost of Fiber* $33
Cost of Mfg $55
Cost of Bagging $20
Margin 14%
US $
* Average of Wood Waste and Beetle Kill
Consolidated Margin of 22%
WOOD PELLET MARKET
Overview
25 X 25 VISION
“By 2025, America’s farms, forests and ranches will provide 25 percent of the total energy consumed in the United States while continuing to produce safe, abundant, affordable food, feed and fiber.”
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25x25 Vision was written into the Energy Independence and Security Act of 2007 by the 109th Congress of the US. This group consists of a diverse alliance of agricultural, forestry, environmental, conservation and other organizations and businesses , endorsed by 31 governors, 15 state legislatures and the US Congress.
Factors Contributing to Growth
WOOD SUPPLY By 2015, over 78% of B.C. pine forest beetle destruction. Over 90% of Canadian wood pellet production is exported
INDUSTRIAL UTILITIES EU mandates 20% electricity from renewable sources by 2020 US target of 25% of energy from farms, forests, ranches by 2025 100 EU plants co-firing with coal, Canada, US, China to co-fire Co-firing with 10% wood pellets, reduces GHG emissions by 9% Replacing coal with wood pellets reduce GHG emissions by 91%
RETAIL /HOME HEATING US govt - $1,500 tax incentives for pellet stoves Europe ahead– Pellets heat 40% of Austrian homes
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Wood Pellet Market Snapshot
Wood Pellets Global Market – $130 billion in 5 yrs Over 66% of EU’s renewable energy from biomass Global Consumption in 2009 – 10 million tons
Europe – 8 million tons (Heat & Power) Rest of World – 2 million tons
Canada 2nd largest pellet exporter Over 90% exported 30 pellet plants; 24 more in planning stage 2.2 million ton capacity
US Renewable energy grew 23% in 5 years Proportion of Clean energy US now11.5%, surpassing
nuclear power
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Beetle Kill & the Carbon Footprint
Globe & MailJan 10, 2010
“...Two months later, federal researchers published findings that exposed a fatal flaw in that great green design (Premier Campbell’s plan on reducing green-house gas emissions). The pine beetle epidemic has killed so many trees that the province’s forests are now net emitters of greenhouse gases....”
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CO-FIRING COAL PLANTS
A Primer
Co-firing Coal Plants – The Future15
Co-firing Coal Plants Benefits
Immediate low cost reduction GHG and other toxic emissions.
Extends life existing coal power plants
Capital Cost of co-firing approx. $225/kw of biomass capacity
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EU Results17
1990 1995 2000 2005 2010E0
20
40
60
80
100
120
140
160
180
1724
40
80
162
EU Electricity Generation from Biomass (TWh)
TWh
66% of EU’s renewable en-ergy is from biomass
Carbon-neutral and renewable18
CO2 released from combustion is recaptured during plant growth by photosynthesis
MARKET & PROJECTIONS
Viridis Outlook
Historic Performance
FY06 FY07 FY08 FY 09
Revenue $625,000 $1,217,317 $2,347,637 $6,168,523
Costs $595,000 $1,239,649 $2,307,616 $5,300,000
EBITDA $30,000 ($22,342) $40,021 $ 230,700
Revenue Growth
20
FY 06 FY 07 FY 08 FY 09
Projected Outlook21
FY 09
(Actual)
2010
(Estimate)
2011
(Estimate)
2012
(Estimate)
2013
(Estimate)
Revenue $6,168,523 $13,800,000 $23,000,000 $36,000,000 $40,000,000
Costs $5,300,000 $12,200,000 $19,500,000 $31,000,000 $34,000,000
EBIT $276,200 $1,600,000 $3,500,000 $5,000,000 $6,000,000
Earnings (After Tax)
$ 230,700 $1,000,000 $2,500,000 $4,000,000 $5,000,000
Number of Tons 25,000 60,000 100,000 160,000 175,000
Sell price / ton $245.00 $230.00 $230.00 $230.00 $230.00
Viridis Market22
Westwood Sales to Distributors/Brokers
• Cypress Pacific (distribution to dealers)
• Wood Pellet Sales.com (direct to consumer)
• Brokers of Shavings (Animal bedding)
• Direct in B.C. local market
CypressSales to Dealers
• Hardware Stores (Ace, Do It Best, Tru Valu)
• Home & Hearth stores
• Wood Pellet Stove dealers
• 250 active customers, 15,000 stores in total
Current
Future
CypressRetail Sales
• Increase Same Store sales and # of outlets
• Big Box Stores (Home Depot, Lowes)
• Tier 2 Distributors
Westwood & Monte LakeBulk Sales
• N.A. Industrial (First Energy, Ontario Power)
• European Retail Export
• Europe, Asia Bulk Market
Viridis Manufacturing Facilities
British Columbia, Canada
Kelowna – existing plant
Monte Lake – new build
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Pellet Plants Supplying Viridis
B.C. Okanagan Region
Armstrong Mill
• Contracted Supply with Pellet Plants close to fiber sources• Pellet Manufacturers have obtained fiber from licensees• Viridis working with Govt & First Nations directly for fiber• Access to fiber provides control of the supply chain
Tacoma Mill
Northern Alberta
Grand Cache Mill
Washington State
Armstrong Mill
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Four Brands25
MGMT & SHARE CAPITAL
Investment Opportunity
Executive Team
Robert Gardner, Q.C. Chairman
Over 30 years experience with public companies
Extensive experience in acquisitions, finance and structuring
Has served on over 10 boards of publicly traded companies
Queens counsel and called to the bars of British Columbia and England & Wales
Chris Robertson Chief Executive Officer
Founder and current CEO has guided company to current revenue of $8 million
Funded growth from cash flow through extremely disciplined financial management
Successful career in lumber trading, remanufacturing and sales management
Michele Rebiere EVP & COO
Responsible for Operations including investment activities, acquisitions, finance
Part of existing management team for past 5 years
Over 20 years in financial services, corporate development, capital markets & operations
Isaac Moss Chief Financial Officer
COO of Syntaris Power, a green energy company
Extensive experience in corporate finance in North America and Europe
Former executive of a mid market investment banking advisory firm in Switzerland consulting to client firms in the forest products, chemicals and bio tech industries
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Board of Directors
Brian Smith Director Currently a Public Policy Advisor (energy /regulatory affairs) with Gowling, Lafleur, Henderson (Canadian law
firm) Former Member of the Legislature of B.C, served as Minister of Education and Minster of Energy & Mines.
Attorney General from 1983 to 1988. Former executive chair of BC Hydro Helped secure U.S.regulatory approval in Washington, D.C. to permit direct power sales within the U.S Completed a five-year term as chairman of Canadian National Railways Director of LGC Skyrota Wind Energy Corp. (formerly "Zenith Industries Corp."), a wind energy company listed
on the Exchange, a director of Genco Resources Ltd., a Vancouver mining exploration company listed on the TSX, and a director of Just Energy Income Fund, an income fund listed on the TSX.
John Heimbecker Director Vice President of Parrish and Heimbecker, Ltd., a private company founded in 1909 In February 2009, Parrish and Heimbecker, Ltd. Acquired Dover Industries Limited, a company listed on the
Exchange that operates in Ontario, Nova Scotia, Saskatchewan and Quebec, and in the U.S.
Alphonse Placktis Director Former CFO, Virids Energy Inc. Principal of Soho Ventures Inc., a developer of high-end residential properties Mr. Placktis brings extensive financial and business expertise as a business owner
John Campbell Director CEO of Stealth Energy Inc., a publicly traded oil and gas company Extensive oil & gas operational experience in Montana & Wyoming
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Private Placement29
FOR IMMEDIATE RELEASE
Viridis Energy Announces Private PlacementMarch 31, 2010
Viridis Energy Inc. (TSXV:VRD) is pleased to announce that it has arranged a non-brokered private placement (the "Private Placement") of up to 10,000,000 units (the "Units") of Viridis at a price of $0.50 per Unit, for gross proceeds of up to $5,000,000. .
Each Unit is comprised of one common share and one non-transferable share purchase warrant. Each warrant entitles the holder thereof to purchase an additional common share at a price of $0.75 per share for a period of 24 months from issuance. .
In the event that the average trading price of Viridis' common shares is $1.35 or greater for a period of 30 consecutive days, Viridis may issue a further news release announcing its intention to reduce the exercise period to 30 days from the date of such news release, subject to the terms and conditions of the Warrants. .
The proceeds will be used to fund its recently announced acquisition of Westwood Fibre Products, continue its expansion plans and for working capital. A finder's fee may, in the discretion of Viridis but subject to the policies of the TSX Venture Exchange, be paid to agents of Viridis with respect to the Private Placement. .
Share Capital
Common Shares
Shares issued and outstanding 18,278,992
Common shares for Private Placement, 10 million shares, $5 million
10,000,000
Common Shares reserved for issuance pursuant to the Warrants
10,000,000
Total 38,278,992
Pre-money, management ownership is 53%.Post-money, management ownership is 20%
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Why Viridis Energy?
Strong Position in rapidly growing biomass industry Experienced management team Profitable business with significant upside Solid customer base in U.S. with expansion opportunity TSX: VRD www.viridisenergy.ca
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