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Prepared by: Andrew Abbass, Owner/Operator THIS DOCUMENT AND THE INFORMATION IN IT ARE PROVIDED IN CONFIDENCE, FOR THE SOLE PURPOSE OF REVIEW BY THE DEPARTMENT OF INNOVATION, TRADE AND RURAL DEVELOPMENT AND MAY NOT BE DISCLOSED TO ANY THIRD PARTY OR USED FOR ANY OTHER PURPOSE WITHOUT THE EXPRESS WRITTEN PERMISSION OF ANDREW ABBASS, OWNER OF HOLISTIC NUTRIENTS.

Holistic Nutrients: Business Plan

November 1

2016 Holistic Nutrients will be located in the City of Corner Brook and serve Newfoundland and the Atlantic Region

Holistic Nutrients

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Table of Contents 1.0 BUSINESS PLAN SUMMARY ............................................................................................................... 2

2.0 POTENTIAL OF BUSINESS/FEASIBILITY .............................................................................................. 4

3.0 MARKETING ....................................................................................................................................... 7

4.0 BUSINESS OPERATIONS ................................................................................................................... 11

5.0 FINANCIAL INFORMATION .............................................................................................................. 28

6.0 TECHNICAL AND CONTACT INFORMATION..................................................................................... 30

7.0 CONCLUSION ................................................................................................................................... 31

APPENDICES ................................................................................................................................................ 32

APPENDIX I – OWNER'S RESUME ................................................................................................................ 33

APPENDIX II – MARKETING/REGIONAL BUSINESS & COMMUNITY DATA .................................................. 37

APPENDIX III – EXAMPLES OF ADVERTISING MATERIAL ............................................................................. 51

APPENDIX IV – FLOOR PLAN ........................................................................................................................ 54

APPENDIX V –START-UP BUDGET ............................................................................................................... 55

APPENDIX VI - BALANCE SHEET ................................................................................................................... 56

APPENDIX VII – INCOME AND EXPENSE STATEMENT ................................................................................ 57

APPENDIX VIII – CASH FLOW FORECAST ..................................................................................................... 59

APPENDIX XI – BUSINESS PERMITS/PROFESSIONAL DETAILS ..................................................................... 61

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Holistic Nutrients Andrew Abbass, Corner Brook, NL

November 1, 2016

1.0 BUSINESS PLAN SUMMARY Business Plan Summary

The Business Holistic Nutrients is being formed as a sole proprietorship to supply an organic supplement that acts as a soil inoculant for root development, a growth and bloom stimulant, a biopesticide, biofungicide, and a method for increasing drought tolerance. The business will achieve this aim through controlled breeding of a species of darkling beetle, Tenebrio moitor. While the organic supplement is the main product of this venture, the business will also be creating a supply of food for exotic pets to be sold through pet stores, a bait supply for the local sports fishing industry, and a protein source for farms in Newfoundland and the Atlantic Region.

Products

• Mealworms - larva stage of the Tenebrio moitor lifecycle, feeder food for exotic pets, supply for bait shops, and a cheap, and environmentally friendly protein source for chicken farms.

• Frass - by-product of mealworm plant digestion. Contains nutrients essential to plant development, symbiotic micro-organisms that promote soil and root health, and chitin that stimulants a plant's immune response, increasing plant growth rates and promoting the release of natural compounds that defend plants against insects.

• Chitin - structural component found in the shell of the mealworms. This is the same substance available in the frass, but concentrated.

The Customers

Primary customers (Business to Business) • Frass & Chitin - Nurseries, farms, garden centers, flower boutiques, landscapers,

tree nurseries, sod farms, golf courses, parks • Mealworms - Pet Stores, bait shops, chicken farms, mink farms

Secondary customers (Business to Customer) • Frass & Chitin - Private gardeners for use on their own vegetable or flower

gardens, houseplants, ornamental trees or lawns • Mealworms - Pet owners & fishermen who wish to order quantities of

mealworms larger than available in retail outlets

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The Opportunity • Frass & Chitin - organic supplements that are easy to produce, store, and use and

that increase the health of the soil. Chitin promotes the natural immune response of plants, this immune response has the benefit of increasing the growth rate and flowering rate, increasing resistance against invasive insects and fungus, and making the plants more drought tolerant.

• Mealworms - for the growing population of exotic pets on the island of Newfoundland. While traditional pets like dogs or cats can subsist on a diet of dried or canned food, pets like reptiles, fish and birds often require the inclusion of insects in their diet to maintain proper health. The supply of insects that feeds this growing population of exotic pets is imported live to various pet stores and individual owners around the province on a weekly or monthly basis and they must spend very little time transit or risk loss due to starvation or oxygen deprivation. This requirement means shipping costs can run very high. By opening a local operation, the largest portion of these can be avoided. This allows a local supplier to offer lower prices to the local consumers while maintaining a similar profit margin. The productions costs associated with mealworm breeding are very low, with a high return on material costs over time.

• Products are completely organic, unlike shellfish-based sources of chitin, which require a inorganic chemical process to separate the chitin from the shells of crustaceans. The mealworm production process is environmentally friendly, producing no unusable waste products and having a low carbon footprint.

Where/ Location

The business will be located within the city of Corner Brook, Newfoundland. Work space will need to be of commercial quality, suitable for a laboratory environment. Must be well-insulated and clean. An office-type space can meet this requirement.

Owner/Manager

Andrew Abbass, Primary owner/operator • Electronics Engineering Technologist • Experienced project manager with skills in project planning, logistics & budget

management, quality assurance & documentation creation • Years of personal research into the life cycle of mealworms including: mold &

mite management solutions, methods for increasing growth rate & total dry weight of products, advanced systems for separating harvestable products

• Please see attached, Appendix I – Owners Resume

Financial Assistance Required $20,000 to cover start-up expenses and first 6 months of operations $5,000 marketing assistance through IBRD

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2.0 POTENTIAL OF BUSINESS/FEASIBILITY Operating Region

Development stage will provide organic supplement to the Humber Region initially and a supply of insects pet owners across the Island of Newfoundland

• Population of Corner Brook - 2012 population: 19,886 • Population of Humber Region - Approx 42,000 • Population of Newfoundland - 526,702 (2013)

Source: Stats Canada

Potential primary customer base in the area

• 100+ primary consumers. • Capture 2.5% of base who wish to use organic alternatives • 2-3 potential customers @ 1000kg per year • Approx 2.5 tons of product (@ $10/kg), valued at $25,000

Potential secondary customer base in the area

• 197,180 detached private households in province • Capture 2.5% of base who wish to use organic alternatives • 5000 potential customers @ 1kg per year • Approx 5 tons of product (@ $15/kg), valued at $75,000

• Business is located in the City of Corner Brook and will work with Memorial University –

Grenfell Campus to complete research on expanded uses of products • 2 hours from Marine Atlantic Ferry to Mainland Canada • 6 hours from Avalon Peninsula

Please see attached, Appendix II – Marketing/Regional Business & Community Data

Location/Site of Business

N/A

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Site Cost/Expenses

Air filtration system to be installed if required Loss management features need to be implemented - See Business Operations: Loss Management Infrared Assessment should be conducted to determine heat losses Shelving units will be constructed on-site

Market Potential

Potential market size in Newfoundland • Primary Consumers - 100+ @ 1000kg/yr • Secondary Consumers - 197,000 @ 1-2kg/yr • Obtaining ~25% of both markets ($250,000 + $750,000 = $1,000,000) • Obtaining ~5% of both markets ($50,000 + $150,000 = $200,000)

Holistic Nutrients will be targeting growth to supply 5% of the potential frass marketplace within 2 years. To meet this demand, Holistic Nutrients would have to produce 15 tons of frass on a yearly basis by the second year, requiring a production cycle producing 41 kg of frass (approx 50 bins) per day. Holistic Nutrients will be growing into a new market within the province of Newfoundland. It will have no local competitors for chitin-based organic plant products, allowing it to quickly develop a niche. Holistic Nutrients has minimal expenditures for a high gross margin. Material costs are kept at a minimum by bulk purchasing and products will be priced aggressively against market competitors.

Competition

Primary Frass Competitors Organic Nutrients

• http://www.onfrass.com • Operates out of California • Shipping costs to Newfoundland are close to Holistic Nutrients expected retail

price per kg. • Retail: $30 US/kg • Wholesale: $15 US/kg

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Prime Nutrients • http://www.primenutrients.ca • Operates out of Ontario • Shipping costs to Newfoundland are $10 on orders less than $59. • Retail: $30 CAD/kg • Wholesale: $20 CAD/kg

There are no competitors in the chitin-based organic supplement marketplace operating out of Newfoundland.

Secondary Competitors

Chemical Fertilizer and Pesticide Products • Chemical fertilizers can burn plants through overuse • Pesticides have been associated with neurological damage in humans • Inorganic additives can have long-term adverse effects on the soil and plants

Sales Forecast

First year • 7.5 tons of frass (2,500kg @ $10 + 5,000kg @ $15 = $100,000) • 1.5 tons of mealworms (750 2kg @ $25 = $18,750) • Gross Revenue = $118,750

Second year • 15 tons of frass (5,000kg @ $10 + 10,000kg @ $15 = $200,000) • 3 tons of mealworms (1500 2kg @ $25 = $37,500) • Gross Revenue = $237,500

Third year • 22.5 tons of frass (7,500kg @ $10 + 15,000kg @ $15 = $300,000) • 3 tons of mealworms (2250 kg @ $25 = $56,250) • Gross Revenue = $356,250

Insurance, Patents/Trademarks/Copyright and Licenses

Insurance • Basic property insurance covering contents

Security systems, trademarks, patents and licensing/franchise agreement(s) • Wi-Fi monitoring and remote management planned for the future • Development of advanced electronic breeding systems in planning stage • Development of advanced separation systems in planning/development stage

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3.0 MARKETING Your Business Image

Organic, holistic, offering essential soil nutrients not readily available through other sources, clean, easy to manage and utilize, environmentally-friendly, reduces greenhouse gases.

Business Name

Holistic Nutrients

Service/Product Mix

Frass - Growth supplement for plants, requires packaging ($10-$15/kg) Chitin - Essential immune, growth and bloom stimulant, highly concentrated, requires packaging and processing ($15/kg) Mealworms - Live or dried protein or chitin source, requires packaging and/or refrigeration ($80/4000 (.4kg) live mealworms, - $15/kg dried) Delivery Service - Cross Newfoundland delivery options, with real time location services available through social media and online ordering.

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Competitors Primary Frass Competitors

Organic Essentials

• http://www.onfrass.com • Operates out of California • Shipping costs to Newfoundland are close to Holistic Nutrients expected retail

price per kg. • Retail: $30 US/kg • Wholesale: $15 US/kg

Prime Nutrients

• http://www.primenutrients.ca • Operates out of Ontario • Shipping costs to Newfoundland are $10 on orders less than $59. • Retail: $30 CAD/kg • Wholesale: $20 CAD/kg

Both competitors have no presence in the Newfoundland marketplace There are no local competitors in the chitin-based organic supplement marketplace

Secondary Competitors

Chemical Fertilizer and Pesticide Products • Chemical fertilizers can burn plants through overuse • Pesticides have been associated with neurological damage in humans • Inorganic additives can have long-term adverse effects on the soil and plants

grown in said soil

Holistic Nutrients will be competing by offering:

• a local source - keeping these revenues within province • lower shipping rates - avoiding costs associated with air freight • lower prices - through automation of various portions of the process, eliminating

the time consuming manual labour components • extensive research - through partnering with Memorial University to offer a

more definite analysis of the products potential instead of the anecdotal evidence offered by competitors

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Pricing

Pricing will be significantly lower than industry average at both wholesale and retail price points: Prime Nutrients

• Retail: $30 CAD/kg • Wholesale: $20 CAD/kg

Organic Essentials

• Retail: $30 US/kg • Wholesale: $15 US/kg

Holistic Nutrients

• Retail: $15 CAD/kg - Half the industry average • Wholesale: $10 CAD/kg - Between half and 2/3rds the industry average

Distribution Channels

Distribution to primary consumers will be conducted on a twice monthly basis using a delivery route that follows the TCH from Corner Brook to St. John's, with deliveries from Corner Brook to Port Aux Basque and the Northern Peninsula taking place on the alternate weeks, should the market demand. Marketing to secondary consumers will be conducted in conjunction with this twice monthly delivery schedule by offering retail packages through primary consumers such as greenhouses and garden centers. This will allow the delivery of additional marketing material in conjunction with the 1-5 Kg amounts packaged for retail sale. Secondary consumers who wish to purchase larger orders will be provided with the website via the retail packaging and brochures available in displays associated with the retail packaging. This will enable Holistic Nutrients to grow its wholesale division, which requires less packaging, and grow its customer base without having to invest in expensive advertising campaigns. As primary consumers who retail Holistic Nutrient's products have firsthand experience with the results the use of frass can offer, each can then provide anecdotal evidence to support the research results catalogued on the website. Distribution channels

1. Direct to primary consumers 2. Secondary consumers through primary consumers 3. Online wholesaling and retailing

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Promotional/Sales Activities

Social Media • Facebook group • Twitter account • BBM (BlackBerry Messenger) Channel

Social media activities offer a means to connect with your audience in a real-time fashion. By allowing primary consumers to know the live location of delivery vehicles on their weekly route, they can plan and advise their customers accordingly. If they're personal wholesale purchasers, they can know immediately when an order at their nearest distributor. Holistic Nutrients Website

• Online retailing and wholesaling of both frass and mealworms • Access to documented experiments • Suggest methods of use and FAQ • Contact information • Organic Certification

Websites offer a variety of static and interactive functionality that can engage the end user of Holistic Nutrients products. Regularly updated blogs that follow the results of on-going experiments (complete with pictures) will be used to illustrate the potential of frass in dealing with a variety of agricultural situations. Additional Marketing Activities Marketing activities will be conducted with support from the Department of Innovation, Business and Rural Development. Please see Appendix III – Examples of Advertising Materials

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4.0 BUSINESS OPERATIONS Space and Equipment

Approximately 1000 to 1500 square feet are required for the development stage of this project. All estimates and floor plans have been calculated for 1200 square feet to fall within this range. Equipment required for the start-up phase:

• oven • air purifier • respirator • vacuum sealer • shelves • refrigerator • compost facility • bins • sorting tools

Materials required during start-up phase:

• bran, oats, barley • carrots and/or potatoes

Equipment requires for expansion phase:

• freeze-drying system • electronic breeding system • milling system

Equipment required for the start-up phase of operations are core components necessary to produce frass, harvest and store products. Advanced systems such as freeze-drying units and milling systems are required for enhance quality of products, while the electronic breeding systems are to create increases in production efficiency.

Floor Plan

Please see Appendix IV – Sample Floor Plan

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Business Logistics

7.5 tons of Frass as primary production goal for first year:

• Feedstock (bran/oats/barley) - 10 tons @ $1000 = $10,000 • Moisture source (carrots/potatoes) - 3 tons @ $1000 = $3000 • Cost of rent for full year = $14,400 • Electrical cost = $2,000 • Gross Cost = $29,400

Gross value of products for first year of production:

• 7.5 tons of frass at wholesale = $75,000 • 7500 bins @ 2000 worms per bin ~ 1500 kg • Dry weight approx 20% of live weight • dried mealworms - 150 2kg bags @ $25 = $3750 • Gross Value = $78,750

Net Yearly Revenue = $49,350 Assumptions:

• 11% of total material converted to mealworms • 58% of total weight converted to frass • 31% carbohydrates used by worms during growth phase • Electrical costs assume well-insulated location • Rent cost assume 1200 square feet @ $1 per square foot

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Daily Operations

Holistic Nutrients is being setup to operate on a recurring harvest cycle that provides a continuous supply of product. It achieves these aims by performing certain functions on a daily basis to maintain a constant supply. While the premium portion of this supply (live mealworms) can be stored for fairly long periods in refrigerated conditions, freeze dried mealworms as a protein or source and their frass can be stored indefinitely. This allows Holistic Nutrients to stockpile its products when the demand is low during the winter to help meet peak supply demand during the summer growing season. To meet these aims, Holistic Nutrients requires 3 daily functions to be performed to perpetuate the production cycle. These 3 functions are Breeding, Production and Harvest. Breeding

• Setup new bins with bran, feeder dish and 40-50 beetles • Replace or resupply moisture source every 4 days on production schedule • After 2 weeks, sieve bran and eggs into new bin, return beetles to breeder pen • Increase bran layer, add feeder dish but no moisture source for the first 2 weeks

Production

• Monitor bran levels in each bin to ensure adequate food supply • Supply moisture sources on based on production schedule • Monitor bins for signs of mold or mite infestation • Complete daily cleaning duties to ensure a clean and sterile workplace

environment • Monitor temperature and humidity to ensure optimum production levels

Harvest

• Separates larva from bran and frass once mealworms are fully mature • Harvest before pupating to ensure quality of protein • Uses mechanical separation through a series of screens and sieves • Live mealworms are refrigerated to prevent further development until

processing

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Each of these functions are required to complete core business operations that allow for a continuous supply. There are other functions that are required to bring the products to market, or important in maintaining workplace health and safety:

Processing and Storage

• Packages the frass for distribution to primary and secondary consumers • Package the mealworms for distribution to pet stores • Process the mealworms to allow for long-term storage • Freeze drying or oven roasting of mealworms allows for long-term storage

o Freeze drying preserves quality of chitin, better for agricultural purposes o Oven roasting degrades chitin, but retains protein content, better for

feedstock use • Vacuum sealing of dried products for long-term storage

Feedstock and Bin Preparation

• Bran is baked to eliminate potential mold spores or mites • Baked Bran is stored in sterile containers until needed • All bins and feeding dishes are washed after use to ensure a sterile environment

Loss Management

• Deals with situations such as having a bin spill within the facility • Preventative measures are used to minimize potential risks • Designed to minimize the impact on the product to minimize loss • Plans for dealing with mites or mold

Equipment Needed

• Oven, freeze-drying system, electronic breeding system, air purifier, milling system, respirator, vacuum sealer, shelves, refrigerators, compost facility, shop vac

Distribution and Shipping

• Utilize synchronized shipping routes for bi-weekly delivery of live mealworms to pet stores

• Ship frass and chitin products through distributors, direct to customer shipping and alongside synchronized mealworm shipments

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Breeding Process

The Mealworm Life Cycle

• Time spent as surviving egg: 10 to 12 days • Time spent as surviving larva: 12 to 54 days • Time spent as surviving pupa: 20 days • Time spent as surviving adult: 80 days • Number of eggs per surviving adult: 0 to 500 (Over 80 days)

The initial breeding process takes up to 2 weeks per bin. During this time, 40-50 beetles are added to a bin containing a layer of bran. Beetles are allowed to lay eggs for 1-2 weeks and then are separated from the bran and eggs through a sieve. The bran and eggs in the new bin are then supplemented with additional bran and a feeding dish. A moisture source is not required for the first 1-2 weeks but will commence on regular schedule once the eggs have begun to hatch in greater quantities.

The beetles retained by the sieve are supplied a new layer of bran and feeding dish. They will continue to be useful to the breeding process for up to 2 months. Excess beetles are returned to the overflow breeding pens until needed.

Several assumptions are made at this stage. These will be tested to refine the process model as experimental data arrives to help refine the process. These assumptions are:

• 20 percent will breed during the 2 week minimum • Minimum of 4 complete successful clutches during 2 weeks ~ 2000 eggs per bin

By recording specific data concerning the mass of bran added to each bins along with the respective moisture sources, over time it will become possible to refine these estimates into more rigorously tested numbers through analysis of the final products. This will allow fine-tuning of the process, enabling the implementation of smaller adjustments to maximize production while minimizing cost.

Automated Electronic Breeding Technology

During the initial stages of this operation, the breeding process represents the most time consuming portion of the entire operation as mature beetles are largely separated into breeding bins by hand.

As the business develops and production scales upwards, this portion of the process will be mitigated by the use of an electronic sorting system, to be developed. By using a

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single bin that can be positioned over several bins, a large number of beetles and a series of openings in each corner, combined with an electronic counting system and shutter system, it becomes possible to implement an automated counting system that would eliminate the majority of the work involved with setting up the breeding bins. Once the process has been completed for each bin and the required number of beetles have been counted into each, an alarm rings, informing the breeder that the system is ready to be placed over 4 new bins.

By using a system such as this, an operation that requires the setup of 40 bins a day would only require an attendant to reset the system 10 times during the run of a day while performing other duties.

Production

The function of the production process is to maintain the microenvironment of each bin to ensure the needs of the larva on a timely schedule. To achieve this aim, the various portions of the production process that involve replenishing feedstock, moisture supplies and completed on a rigorously schedule to ensure the process is adequately controlled.

Feedstock

While bran levels in the early stages are not a major issue, once the mealworm larva have grown to a certain size they can consume their feedstock at a much faster rate. As such, the bran levels in the bins are be monitored more closely near the end of their lifecycle and small quantities of bran are added as needed. All bran added is weighed and documented on the process sheet.

• Holistic Nutrients initial feedstock is bran, variations have been noted in the development of mealworms grown on white or red bran

• After the development phase, experiments will be carried out to determine the efficacy of alternative feedstock

Moisture Source

Mealworms can survive for long periods without adequate supplies of water by resorting to cannibalism. To offset this distressing tendency, an adequate water supply should be readily available in each bin. Water sources must also be placed on associated

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plastic feeder dishes. This minimizes the possibility of the water source contaminating the bran and promoting the growth of molds.

• Holistic Nutrients will initially use sliced carrots for this operation, as anecdotal evidence suggest it lasts the longest, but will experiment will alternative water sources if needed

Monitoring

Aside from monitoring the food level in each bin, attendants will have to monitor the bins for other signs of infestation as well as the temperature and humidity levels of the facility.

At the first sign of a mold or mite infestation, the contents of the bin must be isolated from their neighbors and managed using specialized techniques to recover the live products, if possible. If it's not possible to recover the population of mealworms due to the infestation, the entire bin is baked for an hour to destroy the infestation and then transferred to the facility's compost pile for later reclamation.

However, by implementing proper humidity and temperature controls and ensuring the bran substrate is baked prior to use, the possibility of mite and mold infestation is mitigated.

• By utilizing a timer for the thermostat and implementing an policy that raises the temperature of the room while not being used by attendants, it becomes possible to increase the breeding cycle rate. As the process evolves, manipulating the temperature of the environment should allow for efficiency increases

Harvest

The harvest portion of the process occurs late in the mealworm growth period, once the first pupates have started to appear the maximize the available protein and to ensure no pupates mature into beetles to lay more eggs in the frass.

The harvesting process uses a series of mechanical sieves to isolate the frass, bran and mealworms at separate levels of the separation system. In this manner, the mealworms themselves are retained in the initial sieve, with the frass and bran products dropping into the next two levels. A secondary sifting screen allows the frass to drop to a bin below while retaining the leftover bran in the middle layer.

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Through this method, a series of bins can be quickly processed, with the mealworms from each bin then transferred into a new container to be weighed and refrigerated before delivery or further processing to prevent further development.

The resultant weight of mealworms, frass and leftover bran is then averaged across the number of bins harvested that day to determine the average production level of each bin. This accumulating data set allows Holistic Nutrients to manipulate process variables such as feedstock and temperature to determine optimum production levels.

• By implementing a limited feeding process later in their development (by adding measured quantities of bran) population pressure increases to the point where larva refuse to pupate. Further experiments with high density feeding will be conducted during the operation of the business to assess potential for continued frass production after the primary harvest

Processing and Storage

Processing of products occurs following the harvest and further separates them into individual product lines.

Live Mealworms

The lifecycle of a mealworm is highly temperature dependent. At higher temperatures their metabolism increases, but the reverse is also true. By lowering the temperatures, living mealworms enter a state of dormancy where they cease to eat or consume food. By utilizing this method, Holistic Nutrients can stockpile live mealworms in refrigeration units for later delivery. Mealworms can be stored in rigid plastic containers during this time, but will be transferred to simple plastic bags for final delivery. Harvest dates should be recorded on each bin and the mealworms should be removed from their hibernation on a weekly basis for a few hours to allow them to feed on a moisture source.

Frass

Once separated from the bran and mealworms, the frass is ready to be packaged almost immediately. It can be weighed into 1, 5 or 10kg bags and vacuum sealed to prevent moisture contamination while stored.

• Once the facility has purchased a mill for the release of chitin, test runs will be performed to see if milling the frass to increase the surface area does not

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damage the underlying biotic life and essential nutrients. This may be implemented across this product line to improve its use dissolved in water

Mealworms (Oven Roasted Vs. Freeze Dried)

While a premium marketplace for mealworm exists within the pet store population, at larger production levels the supply begins to outstrip the demand. As flooding the market with live mealworms at lower prices would do nothing to increases their consumption levels, additional methods of storage will be implemented to retain the essential nutrients required. This breaks down into two categories, protein or chitin.

When preserving mealworms future use as a protein source, they will be oven roasted. The heat of the roasting process degrades the chitin while maintain the protein. The oven roasted mealworms can then be stored whole or ground into a feed powder.

When preserving mealworms for use in the agriculture industry as a chitin source, they will be freeze dried. Chitin degrades at higher temperatures, so by freeze drying the mealworms their potential as a chitin source can be maximized. The freeze dried mealworms can then be ground into a powder and vacuum sealed for distribution.

Excess Beetles

As the breeding operation relies on maintaining an large population of beetles, there will be natural die offs as the beetles expire due to old age. Rather than being a waste product, expired beetles would be freeze dried along with excess mealworms to be ground for use in the agriculture industry.

Feedstock and Bin Preparation

Feedstock Quality Control

The largest issue with storing large volumes of feedstock in an enclosed space is the risk that a infestation of mites or mold will develop. To mitigate this issue, the bran should be stored in a warm, dry room to keep the humidity levels as low as possible. In preparing the feedstock for use in the mealworm production cycle, it should also be baked for an hour at a low temperature. This removes any remaining water from the feedstock and eliminates potential mite infestations before they can become problems.

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Bin Preparation

After the daily harvest has been completed, the bins and feeding dishes should be soaked in a weak bleach solution to remove all surface contaminants. After soaking, they're washed with a mild detergent and returned to the excess bin pile for future use. This ensures that each successive generation of mealworms is provided with a sterile and contaminant free environment.

Specialized Bins

A series of experimental bin designs are being constructed to simplify aspects of the breeding process.

• Pupating bins are designed to minimize cannibalism amongst newly molted beetles and allow for better humidity control during this sensitive phase of the process

• Electronic counting systems are used in other bins to minimize the manual labour component of setting up new breeding bins

• Specialize high frass production and stressing bins will be used to create high population density environments over metal screens to allow mealworms to continue producing frass once removed from the breeding cycle

Loss Management

Since there are no hazardous chemicals used in this production process, plans for dealing with accidents or spills rely on taking preventative measures to ensure easy recovery.

Bin Spillage

Should a bin be upended while be processed at the facility, a number of simple steps will be taken to mitigate loss of product and possibility of escaping mealworms. A three stage plan (The Three Rs) will be implemented that:

• Restricts the mealworms mobility through use of a larger bin • Rescues the population through use of dustpan and broom • Restores the colony to a sustainable or harvestable state

By ensuring the facility is regularly cleaned, contamination of the facility will be kept at a minimum and restored bins should be able to re-enter production until completion.

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However, for the purposes of recording data, a restored bin will be marketed as compromised and will be processed separately and not considered in the larger data set.

Preventative Measures

To offset issues caused by a possible spill or contamination, a construction policy will be implemented that minimizes these possibilities.

Too fulfill this aim these issues will be addressed:

• All shelving will be sealed to the floors to eliminate loss during a spill situation. By minimizing possible escape routes, the time required to recover room a spill in minimized.

• Shelving units will be designed to minimize spill risks during feeding.

• Regular bleach-based cleaning will be used to maintain a clean environment so spills have a lower risk of contaminating the substrate

• Thermometers and hygrometers will be monitored on a daily basis to watch for fluctuations. Maintaining a stable temperature and humidity are key to controlling this process and minimizing the risk of mold or kite infestation.

Workplace Health and Safety

While the entirety of this venture relies on the use of organic, non-toxic materials, one of these primary products, the chitin, does represent a known allergen risk that has been shown to trigger asthma attacks in susceptible individuals, as well as possibly triggering the development of allergies after long-term exposure.

The breeding portion of the operation should produce a low volume of air borne particulates that falls below the allergen requirements. However, the harvesting process requires mechanical agitation of the substrate, leading to high volume if particulates that must be dealt with I'm the working environment. To offset this issue, certain protocols have been developed. All harvesting will be conducted in a specialized working room separate from the production room. This room will have an industrial air filtration system installed to minimize the chitin present in the air during operations.

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Attendants working in this room during this cycle will be required to wear specific protective equipment:

• Protective lab coat • Full face respirator • Non-latex gloves

In addition to these protective policies, cleaning policies are also in place. Once the daily harvesting and bin setup has been completed, a general clean up will be conducted to keep the environment as clean as possible. These duties include:

• Vacuuming of the production and harvesting room. No sweeping as this will contribute to airborne particles.

• All floor surfaces will be washed with a light bleach solution to keep the environment relatively sterile

Equipment & Materials Needed

To conduct its operations, materials and several pieces of equipment will be used or developed during the course of running the business. The equipment list is as follows:

Oven • Required for baking the bran • Destroying contaminated substrates • Dehydrating mealworms for long-term storage as a protein source • Model: Generic • Supplied by: Kijiji • Cost: $500

Freeze Drying System (Not Required for Start-Up Phase) • Required for preserving chitin sources for agricultural use • Model: Labconco FreeZone System - To Be Determined • Supplied by: http://coleparmer.ca • Cost: $15,000 - $30,000

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Electronic Breeding System • To increase the efficiency of breeding operations by removing as much of the

manual labor component as possible. • Model: Prototype • Supplied by: Holistic Nutrients R&D Division • Cost: $100

Air Purifier • Required to maintain air quality in the production and harvesting rooms • One floor model for production • One ceiling mount for harvesting • Supplied by: http://globalindustrial.ca • Cost: $300 - $600

Milling System • Used to prepare products for market • Increases surface area of freeze dried mealworms to improve chitin

accessibility Turns roasted mealworms into flour additive • Separate model to be used for frass milling if needed. • Supplied by: Healthy Kitchens (http://rwglobal.com/~healthykitchens) • Cost: $350

Respirator • For use during the harvest process • Minimizes exposure to possible allergens • Model: Multi-Purpose Respirator, Full face mask (2) • Supplier: http://globalindustrial.ca • Cost: $350

Vacuum Sealer • Eliminates moisture issues with long-term storage • Allows dried products to be stored until needed • Used to extend the storage life of every product except live mealworms • Model: FoodSaver® Vacuum Sealing System V2244 • Supplier: Canadian Tire • Cost: $200

Refrigerator • Used for short term storage of live mealworms as well as moisture feedstock • Model: Generic • Supplier: Kijiji • Cost: $400

24

Composting Site • Used to reclaim spoiled bin substrate • Model: Composter 11 cu. ft • Supplier: Canadian Tire • Cost: $70

Shelves • To be constructed within the production facility • Supplier: Kent • Cost: 10 @ $100/shelf (each shelf holds approx 200 bins)

Bins • For use in the production facility • Size: 6"x6"x12" • Supplier: ikea.com/dollartree.com/etc • Cost: 2000 @ $1 - $2 per bin (expecting bulk rate discounts)

Sorting Tools • For use in the harvesting facility • To be purchased and constructed • Supplier: Miscellaneous • Cost: $50

Shop Vac • For cleaning purposes • Supplier: Canadian Tire • Cost: $80

Materials required for operation:

Bran/Oats/Barley • Mealworm feedstock • Supplier: Shur Gain Feeds N Needs • Cost: $1/kg

Carrots/Potatoes • Mealworm moisture source • Supplier: Retail use • Cost: $1/kg

Packaging • Vacuum sealing & live storage packaging • Supplier: Wairfairsupply.com • Cost: $0.60/bag

25

Holistic Nutrients

Equipment & Materials

Date: May 4th, 2014

EQUIPMENT Oven

$350

Air Purifier

300 Milling System

350

Respirator

350 Vacuum Sealer

100

Refrigerator

400 Composting Site

70

Shelves

1,000 Bins

3000

Sorting Tools

50 Shop Vac

80

Total

$6,050

MATERIALS Bran/Oats/Barley (3 tons)

3,000

Carrots/Potatoes (1 ton)

1000 Packaging (2000 @ .25)

$500

Total

4,500

26

Distribution & Shipping

Distribution to primary consumers will be conducted on a twice monthly basis using a delivery route that follows the TCH from Corner Brook to St. John's, with deliveries from Corner Brook to Port Aux Basque and the Northern Peninsula taking place on the alternate weeks, should the market demand. Marketing to secondary consumers will be conducted in conjunction with this twice monthly delivery schedule by offering retail packages through primary consumers such as greenhouses and garden centers. This will allow the delivery of additional marketing material in conjunction with the 1-5 Kg amounts packaged for retail sale. Secondary consumers who wish to purchase larger orders will be provided with the website via the retail packaging and brochures available in displays associated with the retail packaging. This will enable Holistic Nutrients to grow its wholesale division, which requires less packaging, and grow its customer base without having to invest in expensive advertising campaigns. As primary consumers who retail Holistic Nutrient's products have firsthand experience with the results the use of frass can offer, each can then provide anecdotal evidence to support the research results catalogued on the website. Distribution channels

1. Direct to primary consumers 2. Secondary consumers through primary consumers 3. Online wholesaling and retailing

Additional marketing will be performed with support from the department of Innovation, Business and Rural Development once products are ready to bring to market.

27

Business Information/Financial Systems and Storage

All documents and records are currently being stored in Microsoft Office compatible formats, including Word for documentation and Excel for financial and process control records.

Holistic Nutrients may purchase professional accounting software packages to simplify storage of financial information in the future, following the completion of an accounting course offered through the College of the North Atlantic.

Organizational Structure of Business

Holistic Nutrients is currently operating as a sole proprietorship with plans to incorporate in the near future.

Regulation

Currently working with the City of Corner Brook to meet zoning and code requirements to obtain required business permit Conducting research in conjunction with Memorial University, Grenfell campus to research effects of products on local soil to obtain usage recommendations for agricultural purposes Will be seeking organic certification to allow products to be marketed with organic labelling

28

5.0 FINANCIAL INFORMATION Start-up Requirements

Equipment: $6,300 (See page 25) Materials: $4,250 (See page 25) Operating Capital for 6 months: $9,450 (7,200/1,500/750) Marketing through IBRD: $5,000 Total Requirement: $25,000 Please see Appendix V - Start-up Budget

Owner(s)’ Investment

In Kind Contributions as of May 1st,2014 Truck $2,500.00

Laptop

$700.00 Cell Phone (1 year)

$900.00

Playbook

$225.00 Home Office Equipment

$250.00

Printer

$100.00 Office Phone

$50.00

Web Space + Domain

$115.00 Breeding Stock

$400.00

Bins & Sorting Equipment

$100.00 Initial Grow Bin Design

$100.00

2nd Species of Beetle

$100.00 Digital Sensors

$30.00

Mint Plants for Research

$100.00 Frass for Research

$100.00

Personal Marketing

$5,000.00 Office/Production/R&D

$2,156.59

Research, Design & Prototyping

Grow Bin Designs

$500.00

Insulated Breeding Bins

$500.00 Feeding Systems

$500.00

Mite and Mold Management Solutions $500.00 Automated Breeding Bin Designs $1,000.00 Large Scale Separation Systems

$500.00

Small Scale Separation Systems

$500.00

Total Contribution $16,926.59

29

Financial Assistance Requested

$20,000 will be required to operate the business during the first 6 months. Repayment is expected to begin by the end of the 3rd month of operation with the full balance repaid during the second year of operation. Monthly payments of $1000 will commence by the end of the 4th month until the debt has been repaid.

Cash Flow Analysis

First year* • 7.5 tons of frass (2,500kg @ $10 + 5,000kg @ $15 = $100,000) • 1.5 tons of live mealworms, 300kg dried (150 2kg @ $25 =$3,750) • Gross Revenue = $103,750

Second year* • 15 tons of frass (5,000kg @ $10 + 10,000kg @ $15 = $200,000) • 3 tons of mealworms, 600kg dried (300 2kg @ $25 = $7,500) • Gross Revenue = $207,500

Third year* • 22.5 tons of frass (7,500kg @ $10 + 15,000kg @ $15 = $300,000) • 4.5 tons of mealworms (450 kg @ $25 = $11,250) • Gross Revenue = $311,250

*All estimates are forward looking statements based on gross production goals and do not reflect the full expected market potential. Please see Appendix VII - Balance Sheet Please see Appendix VIII - Income and Expense Statement Please see Appendix IX - Projected Cash Flow

31

7.0 CONCLUSION

Holistic Nutrients is being formed to supply an organic supplement that acts as a soil inoculant for root development, a growth stimulant, a bloom stimulant, a biopesticide, biofungicide, and a method for increasing drought tolerance. The business will achieve this aim through controlled breeding of a species of darkling beetle, Tenebrio moitor. While the organic supplement is the main product of this venture, the business will also be creating a supply of food for exotic pets to be sold through pet stores, a bait supply for the local sports fishing industry, and a protein source for farms in Newfoundland and the Atlantic Region. I look forwards to your support in this venture.

Thank you Andrew Abbass May 4th, 2014

32

APPENDICES

33

APPENDIX I – OWNER'S RESUME

34

Andrew Abbass

Qualifications

• Electronics Skills: Soldering, troubleshooting, reverse engineering, cable construction • Software Experience: OrCAD & PSpice, AutoCAD, Word, Excel, Visual Basic, C, Assembly, Dreamweaver, Adobe

Premiere Pro • Operating Systems: Windows 3.1 – Windows 7, Mac OSX, Linux distributions • Install, Configure, Maintain and Troubleshoot: Computer circuits and systems, Analog and digital

communications systems, Industrial Instrumentation and Process Control Equipment, Computer Networks • Analyze and design electronics systems using PC aided design software or traditional workbench • 15 years experience providing home and office PC repair • Strong organizational, analytical thinking, communication, individual and team skills • Valid driver’s license with clean driving record

Education Electronics Engineering Technology Diploma 2007–2010 College of the North Atlantic – Corner Brook, Newfoundland and Labrador 4.00/4.00 GPA

Graduate Thesis – Community/Campus Radio Station • Co-founded the Bay of Islands Radio Society • Developed a web-based joint booth environment to allow both the College of the North Atlantic and Sir

Wilfred Grenfell College access to a shared FM/web station • Established a network of community contacts to secure locations and equipment • Provided technical expertise • Delivered extensive documentation and regular progress reports

Awards and Scholarships

• CNA President’s Award – Highest GPA in graduating class • Honor Roll – 2008, 2009, 2010 • Silver Medal at the 2010 Skills Canada Provincial Competition • The International Grenfell Association Scholarship – 2009/2010 • The Aliant IT Scholarship – 2008/2009 • First Year Engineering Technology Award (with commendation from instructors) – 2007/2008

Faculty of Computer Science 2002–2003 Memorial University – St. John’s, Newfoundland and Labrador Faculty of Science, Physics 1998 – 2000 Acadia University – Wolfville, Nova Scotia

35

Relevant Employment History

Lead Technician November 2011 – May 2013 IBM/Loblaws – Newfoundland and Labrador

• Travel within the province to complete IT work on various Loblaw pharmacy and grocery outlets • Perform scheduled lane maintenance and POS upgrades • Install network printers and configured specific workstations for access

Field Services Project Manager November 2010 – June 2011 Alpha Technologies Ltd – Corner Brook, Newfoundland and Labrador

• Involved in the expansion of the Power Systems Field Services division for Alpha Technology Ltd • Responsible for planning and managing DC power system and battery upgrades for various telecoms • Travelled extensively across Canada to oversee projects for CBC, RIM, Rogers and others • Developed detailed documentation for internal records and delivery to the customer

High Speed Technical Support August 2010 – October 2010 Sykes Call Center – Corner Brook, Newfoundland and Labrador

• Provided quality customer support for BellAliant High Speed Internet customers • Consistently delivered lower than average customer handling times without sacrificing call quality

Tree Planter May 2010 – July 2010 Anderson & Yates Forestry Consultants – Corner Brook, Newfoundland and Labrador

• Participated in the reforestation of harvested land • Transplanted quality-based seedlings at set densities into large areas of land

Tree Runner June 2009 – July 2009 Anderson & Yates Forestry Consultants – Corner Brook, Newfoundland and Labrador

• Provided planters with a steady supply of seedlings • Maintained planting sites and general clean-up of equipment • Transported planters to new plant sites

Independent Content Provider May 2004 – April 2007 Newdor.com Media Inc. – International

• Recruited local and international artists to help develop recognition for a new form of DRM-enabled media distribution

• Experimented with online radio webcasting and streaming solutions as well as record label-style duplication of autoplay data CDs in regards to this new format

Customer Associate – Electronics Department September 2001 – December 2001 5 Wing Canex – Canadian Forces Base, Goose Bay, Newfoundland and Labrador

• Provided product and technical information on a wide variety of audio-visual, computer and computer peripheral equipment

• Delivered excellent customer service

36

Computer Technician and Customer Associate September 2000 – March 2001 Omni Electronics – New Minas, Nova Scotia

• Provided hardware and software solutions; break fix, preventative maintenance, upgrades, SOHO networking solutions

• Responsible for up selling and cross selling a variety of OTS software packages, peripherals and IBM compatibles

Freelance Computer Consultant 1995 – Current Computer Repair Technician – Corner Brook, Newfoundland and Labrador

• Perform a variety computer related repairs, tune ups and upgrades, SOHO installations of complete systems as well as wired and wireless networks

• Provide VHS and MiniDV to DVD encoding and webhosting services

Community Involvement Technical Advisor 2009 – Current Bay of Islands Radio Society – Corner Brook, Newfoundland and Labrador

• Co-founded the Bay of Islands Radio Society • Attending progress meetings • Assisting with regulatory licensing • Established a network of community contacts to secure locations and equipment • Provide technical expertise

Volunteer 2006 – 2008 SPCA – Goose Bay, Newfoundland and Labrador

• Provided care and feeding to animals under the protection of the SPCA on a daily or weekly basis

References Available Upon Request

37

APPENDIX II – MARKETING/REGIONAL BUSINESS & COMMUNITY DATA

38

Primary Market List for Frass & Chitin

Nurseries, Garden Centers Address Phone numberRise And Shine Nursery & Garden Care 825 Main Rd, Goulds, NL A1S 1J4 709-747-4463C D's Trees 406 Marine Dr, Logy Bay, NL A1K 3C9 709-682-1853Bickerstaffe Nurseries & Gardens 131 Witch Hazel Rd, PORTUGAL COVE CONCEPTION BAY, NL 709-895-3701Birdhouse Garden Market 164 Hamilton River Rd, Happy Valley-Goose Bay, NL A0P 1E0 709-896-9292Driftwood Nursery Robinson's GD, Jeffreys, NL A0N 1P0 709-645-2110Glendale Gardens 16 Glendale Ave, Mount Pearl, NL A1N 1M9 709-368-5106Green Thumb Nurseries & Crafts 29 Toulinquet, Twillingate, NL A0G 4M0 709-884-2636Hickey's Greenhouses & Nursery 782 Conception Bay Hwy (CBS), Kelligrews, NL A0B 1S0 709-834-5525Hickey's Greenhouses & Nursery Dunville GD, Dunville, NL A0B 1S0 709-227-7217Holland Nurseries 401 Torbay Rd, St John's, NL A1A 5C9 709-726-1283Humber Nurseries Ltd 137 West Valley Rd, Corner Brook, NL A2H 2Y1 709-634-3241North Atlantic Nurseries 213 Kippens Rd, Kippens, NL A2N 1B8 709-649-1067Pat's Plants & Gardens Main Rd, Bay Bulls, NL A0A 4K0 709-334-2987Shadybrook Farms Heavy Tree Rd, St. John's, NL A1G 1P5 709-368-2746Tiffany Rose Nursery & Gift Shoppe 132 TCH, Appleton, NL A1V 3W1 709-679-5686Wagner's Nursery Ltd Riverhead, Harbour Grace, NL A0A 2M0 709-596-3356Beauty Of Flowers Nursery 6 Pentecostal Rd, Hare Bay Bb, NL A0G 2P0 709-537-5505Dark Cove Cottage NL 709-674-4545Hallett Nursery NL 709-677-2577Tizzard's Nursery & Garden Centre Gander Bay Rd, Gander, NL 709-256-3029Traverse Gardens Plant Nursery 12 Byrnes Lane, Torbay, NL A1K 1H2 709-437-5539Holland Nurseries St John's, NL A1A 5C9 1-877-726-1283Shed City & Outdoor Living Ltd 1164 Topsail Rd, Mount Pearl, NL A1N 5E8 709-364-7433Rogers Farm & Greenhouses Ltd 453 Creston Blvd, Marystown, NL A0E 2M0 709-279-4100Woodland Nurseries Trans Canada Hwy, St. John's, NL A1B 3M7 709-368-0472Murray's Garden Centre And Horticultural Service s Ltd 1525 Portugal Cove Rd, Portugal Cove-St Philips, NL A1M 3H3 709-895-2800Grow Crazy 140 Campbell Ave, St John's, NL A1E 2Z8 709-726-4769Hillview Gardens Nursery & Variety McKay's, Jeffreys, NL A0N 1P0 709-645-2221Balsom Gardens Ltd 366 Memorial Dr, Clarenville, NL A5A 1P4 709-466-3599Brookside Flowers Powell Dr, Carbonear, NL A1Y 1A5 709-596-6735Co-Op Country Store 1112 Topsail Rd, Mount Pearl, NL A1N 5E7 709-368-4321Garden Centre Florist 101 Commercial Rd, Springdale, NL A0J 1T0 709-673-5015Gaze Seed Co (1987) Ltd 9 Buchanan St, St John's, NL A1C 4T7 709-722-4590The Greenhouse Tch, Little Rapids, NL A1Z 1Z1 709-634-5757O'Neill's Gardenland Con Bay Hwy, Spaniards Bay, NL A0A 3X0 709-786-9533Bayview Gardens Lethbridge, Musgravetown, NL A0C 1V0 709-467-2399Black Duck Garden Centre Black Duck Siding, Stephenville Crossing, NL A0N 2C0 709-646-5514Johnson's Garden Lower Island Cove, NL 709-584-3141Labrador Straights Regional Greenhouse 709-927-5231Robbins Enterprises & Garden Centre 187 Goose Arm Rd, Deer Lake, NL A8A 3T3 709-635-7900Dean's Green House & Flower Shop 52 Commonwealth Dr, Botwood, NL A0H 1E0 709-257-4657Beautiful Flowers Nursery A 28 Botwood Hwy, Bishops Falls, NL A0H 1C0 709-258-6868

39

Sod Farms & Landscapers Address Phone NumberCutting Edge Lawn Care 15 Carlow Pl, St John's, NL A1E 6H6 709-770-3363Hussey's Sodding Services NL 709-685-4154Green Valley Farms 20 Forest Rd, Botwood, NL A0H 1E0 709-257-4881K&C Landscaping 38 Sunderland Dr, Paradise, NL A1L 2X5 709-689-4340J & C Sod Farm 217 Southern Shore Hwy, Goulds, NL A1S 1R3 709-334-3531Emerald Sod Producers Inc St Shotts, Trepassey, NL A0A 4B0 709-438-2306Alderbrook Acres Ltd 14b Walsh's Av, Pasadena, NL A0L 1K0 709-686-5088Norwest Sod Ltd Creston S, Marystown, NL A0E 1K0 709-279-2442Queensville Sod Farms Limited 21468A Leslie St 1-866-237-6348Polar Farms Ltd 709-368-0820Baccalieu Sod Farms Inc 709-588-7938Bolton T Sod Co Limited 1-800-667-9469Elmsdale Landscaping Ltd 1-800-219-7637Expert Property Services 17 Dundee Ave, Mount Pearl, NL A1N 4R6 709-691-1728Gosse's Landscaping Incorp 20 Russworthy Pl, Torbay, NL A1K 1J7 709-437-7223Notre Dame Sod Farm 9 Industrial Pk, Lewisporte, NL A0G 3A0 709-535-3135Nutri-Lawn 709-700-1414Sinnott Hydroseeding 111 Old Bay Bulls Rd, Kilbride, NL A1G 1C8 709-700-0994K C Reid Sod Farm Reids Ln, Deer Lake, NL 709-636-2233Pinedale Farms Terra Nova Rd, NL 709-265-6221The Other Side Sod Farm 709-277-0510Virgin Valley Turf Farm Reids Ln, Deer Lake, NL 709-636-1719Carew Services Ltd 1437 Portugal Cove Rd, Portugal Cove-St Philip's, NL A0A 3K0 709-700-1025Murray's Landscape Services Limited 1525 Portugal Cove Rd, Portugal Cove-St Philips, NL A1M 3H3 709-895-2800PJP Enterprises 29 Symonds Ave, St John's, NL 709-722-6729Clay Oates Landscaping 4 Kelby Corners, Carbonear, NL A1Y 1A4 709-596-2147Edgeworks Landscaping St. John's, NL 709-765-7944Great Walls of Newfoundland NL 709-722-5296Atlantic Landscaping NL 709-685-8653Cangro Services Ltd NL 709-634-7781Garden Works Ltd The 26 Lloyd Cres, St John's, NL A1E 2H8 709-368-0676Kendell's Construction Ltd NL 709-895-2255Squires Garden Service 814 St. Thomas Line, Portugal Cove-St Philips, NL A1M 1A6 709-895-2696Living By Design 2 Neal St PO Box 11, Labrador City, NL A2V 2K3 709-944-5577Clearaway Contracting 537 St. Thomas Line, Paradise, NL A1L 3T3 709-895-2999Bowering Ponds & Gardens Ltd 344 Portugal Cove Pl, St John's, NL A1B 4B8 709-753-5473Asplundh Tree Service ULC NL 709-660-8733Affordable Lawn Care 709-834-4422Botany Bay Gardens 31 Morris Ave, St John's, NL A1C 5E6 709-727-1506Craigs Landscaping Plus NL 709-788-2414

40

Primary Market List for Mealworms

Golf Courses Address Phone NumberBrookside RV Park and Golf 1 Main St, Hatchet, NL A0E 2A0 709-546-2777Pippy Park Golf Course 460 Allandale Rd, St John's, NL A1B 4E8 709-753-7110Gander Golf Club Newfoundland Trans Canada Hwy, Gander, NL A1V 1W8 709-256-4653Pitchers Pond Golf Course Whiteway, Hearts Delight, NL 709-588-4653Bally Haly Golf & Country Club 100 Logy Bay Rd, St John's, NL A1A 5C6 709-726-4021Clovelly Golf Course 100 Golf Course Rd, St John's, NL A1A 0A6 709-722-7170Glendenning Golf (Southlands), St. John's, NL A1A 1A1 709-368-4747Gros Morne Resort Route 430, St. Pauls, NL A0K 4Y0 709-243-2606Humber River Golf Club 21 Airport Rd, Deer Lake, NL A8A 1A4 709-635-5955 (5110)St Andrews Na Creige St Andrews Codroy Valley, St Andrews, NL A0N 1W0 709-955-3322Tamarack Golf Courses Duley Cres, Duley, NL 709-944-3007Terra Nova Golf Resort NL 709-543-2525The View Golf Resort Rte 235, Princeton, NL A0C 2K0 1-888-845-8439The Wilds at Salmonier River NL 709-229-5444Willows Golf Course Holyrood Access Rd, Holyrood, NL A1B 1A3 709-229-1007Amaruck Golf Club Hamilton, Happy Valley-Goose Bay, NL A0P 1E0 709-896-2112Grand Falls Golf Club NL 709-489-7631Pasadena Pitch & Putt 709-686-3400Blomidon Country Club & Pro Shop 709-634-3206

Store Name Address Phone Number Pets-R-Us 67 Queen St, Stephenville, NL A2N 2M6 709-643-6081Critters & Things 11 Commonwealth Ave, Mount Pearl, NL A1N 1W4 709-368-8660Pet City Village Shopping Centre, St. John's, NL A1E 4N1 709-364-6644Pet City 44 Maple Valley Rd, Corner Brook, NL A2H 6L8 709-639-4738Tropical & Marine Pets 611 Torbay Rd, St John's, NL 709-576-3474Pet Zone 3 Kenmount Rd, St John's, NL 709-754-9663Patches Pet Supply 39 Park St, Grand Falls-Windsor, NL A2B 1C8 709-489-4944Pet Central Holistic Pet Foods 5 Stavanger Dr, St. John's, NL 709-738-7627Topsailstar Pet Center 70 Ruby Line, St John's, NL A1G 1P9 709-747-5555Mount Pearl Multi Menu 1007 Po Box, Mount Pearl, NL A1N 3C9 709-689-4507Natural & Organic Pet Foods NL 709-689-1763Pet Central Gander, NL A1V 0A0 709-256-3930Pets Unlimited Inc 90 Aberdeen Ave, St John's, NL A1A 5N6 709-722-7387Pets Unlimited Inc 39B Kelsey Dr, St John's, NL A1B 5C8 709-733-7387Pet Planet 470 Topsail Rd, St John's, NL 709-747-1379

Labrador locationsPaws Pet Boutique 331 Hamilton River Rd, Happy Valley Goose Bay, NL 709-896-5590Feathers & Fins Pet Shop 201 Humber Ave, Labrador City, NL A2V 2Y3 709-944-7700

41

Regional Community Profile Greater Corner Brook Area/Western Newfoundland

Population – Western Newfoundland 2013 87,563 Population – Western Newfoundland in 1986 113,910 Population – Greater Corner Brook Area 2013 40,805 Number of Communities 168 The population in the region has decreased by 23% since 1986 (20,083 live in Corner Brook)

The population in the region represents 18% of the population in Newfoundland Labrador

Community Assets Innovation and Business Opportunities Educational Assets - Memorial University – Grenfell Campus , Marine Biology Station - College of the North Atlantic, (4) campuses: Port au Basque, Stephenville, Corner Brook, St. Anthony - Private Colleges (3) Academy Canada, Western College and Compute College - Secondary School System throughout the region

Post-secondary institutions in the Corner Brook area offer a significant number of programs/courses in environment and natural resource management. They represent opportunity for future development in the Green Economy.

Recreational Assets Civic Centre – Pepsi Centre, Corner Brook Arenas – (11) throughout Western Newfoundland Ski Resort – Marble Mountain Swimming Pools – (9) throughout Western Newfoundland Golf Courses – (5) throughout the Western Newfoundland Sports/recreational fields – located in the majority of communities in Western Newfoundland

Community recreational assets contribute to quality of life for residents and enable the region to attract and retain creative workers and their families.

Cultural Assets Fine Arts School - Memorial University-Grenfell Campus Theatre Groups – throughout Western Newfoundland Arts and Cultures – Corner Brook and Stephenville Visual and Graphic Art Programs – College of the North Atlantic Qalipu First Nation - Cultural Programming

Community non-profit theatre groups, college and university programs/courses and local cultural/art organizations offer the opportunity for new products/services and expansion of existing products, i.e. TNL, Trails Tales and Tunes etc…

Environmental/Natural Assets National & Provincial Parks/Natural Areas – Gros Morne National Park, Provincial Parks, Historical Sites and Natural Areas throughout the region Hiking Trails – National Park, Community Trails throughout the region and the International Appalachian Trail Forestry – large areas of forest with timber, fresh water and non-timber assets Fisheries – coastal areas with significant marine/fisheries assets Oil & Gas – major deposits off the coast of Western Newfoundland. In the early stage of development Hydro Transmission – transmission of Labrador Hydro from Labrador through Western Newfoundland to Nova Scotia. Beginning construction stage.

Federal, Provincial and community natural areas and access to wilderness areas through trails and parks. Creates opportunities for residents and visitors, i.e. sustainable tourism and quality of life opportunities. Business opportunities exist in forestry, fisheries, aquaculture and non-timber forest products, i.e. mushrooms, crafts, wood pellets and finished wood products. In addition, there are exist opportunities in construction, natural resource management and oil & gas development. Source of data: Government of Newfoundland and Labrador

Source: Navigate Entrepreneurship Centre MUN - Grenfell Campus

42

Industry and Business Data

Greater Corner Brook Area/Western Newfoundland Number of Businesses – Western Newfoundland (2011) 2,998

A drop from 3,438 in 1998. A decrease of 12.80% in 13 years. A loss of 440 businesses.

Number of Businesses – Greater Corner Brook Area (2011) 1, 416 (720 in the City of Corner Brook)

Number of Businesses – Newfoundland Labrador (2011)

16,948 Western Newfoundland now represents 17.69% of the businesses in the province. In 1998 it was 19.4%, a drop of 1.71% in 13 years.

Key Industries/Services Western Newfoundland

Note: The fisheries and forestry sectors and manufacturing have declined. New business opportunities will depend on innovation and new entrepreneurial efforts. The Navigate Entrepreneurship Centre’s focus is students, environment and innovation. The goal is to advance new entrepreneurial activities based on the educational and training assets found at Memorial University – Grenfell Campus and the College of the North Atlantic – Corner Brook Campus These assets include programs in natural resource management; environmental studies, policy and science; tourism studies; information technology; geographic information systems and engineering. By leveraging the educational strengthens of its two post-secondary institutions Navigate will work with students, faculty and staff to advance business activities through innovation in areas identified in the emerging green economy, i.e. energy efficiency/green buildings, sustainable/alternative tourism etc… Source of data: Government of Newfoundland and Labrador and the Navigate Entrepreneurship Centre

Fisheries – Decline in traditional processing and harvesting. Opportunities in value added processing, innovative marketing – fresh fish buying clubs and sustainable certification etc… (24 fish processors operate throughout the region) Employing 2,600 fish harvesters and approximately, 2,800 fish plant workers. In addition, with two active aquaculture site, significant coastline and fresh (ground) water supplies there is opportunity to expand Tourism – Growing tourism industry based on the region’s natural assets and emerging cultural products, i.e. Gros Morne National Park, International Appalachian Trail. Tourism employs over 3,000 employees annually and involves 600 plus businesses. 183,000 visitors plus travel through the region for holidays annually. Furthermore, both the Gulf and Labrador Ferries operate in the region and offer potential in visitor services and products. Forestry – The main industry player is Corner Brook Pulp& Paper and a number of medium sized sawmills. Non-timber forest products are limited to a number of food producers, i.e. Dark Tickle, Labrador Preserves and craft producers Transportation - Opportunities exist with the completion of the Trans Labrador Highway in 2009. Potential includes a new transportation infrastructure and more visitors travelling the Trans-Labrador and Western Newfoundland Highways Culture/Arts – Cultural and artistic products are emerging and hold opportunities linked to the region’s tourism industry, i.e. theatre, art, first nation cultural development and local music products/events, i.e. Trails, Tales and Tunes, Theatre NL and local artist/galleries Agrifoods – a focus on locally grown food, expansion of agriculture and the establishment of agrifood research labs at Memorial University – Grenfell Campus offers opportunities for new business activities in agriculture Manufacturing – innovation is required Hydro Power Transmission – opportunities in construction of the Labrador Power Corridor through Western Newfoundland Environmental Services – the emerging green economy provides business opportunities Source: Navigate Entrepreneurship Centre MUN - Grenfell Campus

43

The economy of the Greater Corner Brook/Western Newfoundland area has been traditionally based on the fishing and forestry sectors. The region will need innovation and new entrepreneurs if its’ economy is to grow in the future. Please see the description of the region’s current economy and the areas that business support agencies and the Navigate Entrepreneurship Centre should direct their focus. In the fishery potential still exists for business development and economic growth. Valued added activities, secondary processing and conservation programs have the potential to expand the industry and create new employment. There is also potential in aquaculture development and linking fishing activities to sustainable tourism products, i.e. fresh seafood marketing and sustainability certification. In tourism, the past twenty-five years has seen the industry become an important new economic sector for the region’s communities, business owners and residents. The Western Newfoundland’s coastline presents a breathtaking kaleidoscope of bays and inlets, islands, jagged headlands, and forested areas. Species of birds and animals from bald eagles, whales, seals, moose and bears to caribou are plentiful and easily available for sightseeing. Past and present cultures have also given the region an amazing legacy rich in history, archaeology and artifacts. The potential for sustainable tourism in adventure tourism, yachting, cruise ships, interpretive programming/services, heritage development, cultural products and craft production is unlimited. In the forestry, activities have until recently been focused only on harvesting for pulp & paper mill in the City of Corner Brook. There are opportunities to develop non-timber forest products and alternative forest uses, i.e. berries, nuts, tree sap, fungi (mushroom), herbs, resins, bark and adventure tourism. In other area’s new business development will benefit from emerging transportation links with Labrador and the Province of Quebec. The completion of the Trans-Labrador Highway and the potential completion of the Quebec North Shore Highway hold significant business opportunities for Western Newfoundland. Agrifood development offers potential in primary and secondary production. The application of innovation to existing and future manufacturing provides new opportunities to manufacturers in the region. The development of Muskrat Falls and the hydro transmission corridor through Western Newfoundland will provide opportunities in construction and logistic. In addition, expanding environmental products & services can assist in the growth of other economic sectors in the region. Examples include green buildings, sustainable/alternative tourism, waste management and energy efficiency. Source: Navigate Entrepreneurship Centre MUN - Grenfell Campus

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Migration

The Residual Net Migration for Economic Zone 08 was 0.55% (230 individuals) in 2011. For the Province, it was 0.56% (2895 individuals) in 2011. Net migration using the residual method is calculated by subtracting the current population from the population in the previous year and then removing the affect that births and deaths has on the population. By doing so, the remainder/residual is the number of people who migrated into or out of the area.

In Economic Zone 08 , 14.6% of the population migrated between 2001 and 2006. For the Province, it was 14.0%. These migrants are movers who, on Census Day, were residing in a different Census Subdivision five years earlier or who were living outside Canada five years earlier.

Marital Status

Information about legally married, widowed, divorced, separated persons or persons who were never legally married is unavailable for Economic Zone 08 in 2011.

In Economic Zone 08 in 2006 there were 19,460 legally married (not separated), 2,475 widowed, 2,245 divorced, 750 separated, 16,040 single people (never legally married). It should also be noted that in this geography, there were 7,945 people 17 years of age or younger.

Source: Community Accounts, Rural Secretariat, NL

47.5%

39.2%

6.0% 5.5% 1.8%

Martial Status Population, 2006

Legally Married

Single

Widowed

Divorced

Separated

47

Migration

In Western Newfoundland Rural Secretariat Region 34.2% of the population migrated between 2001 & 2006. For the province, it was 14.0%. These migrants are movers who, on Census Day, were residing in a different Census Subdivision five years earlier or who were living outside Canada five years earlier.

Marital Status

Information about legally married, widowed, divorced, separated person or persons who were never legally married is unavailable for Western Newfoundland Rural Secretariat Region in 2011.

In Western Newfoundland Rural Secretariat Region in 2006 there were 41,990 legally married (not separated), 5,855 widowed, 4,505 divorced, 1,655 separated, 35,820 single people (never legally married). It should also be noted that in the geography, there were 16,965 people 17 years of age or younger.

Source: Community Accounts, Rural Secretariat, NL

46.7%

39.9%

6.5% 5.0% 1.8%

Marital Status Population, 2006

Legally Married

Single

Widowed

Divorced

Separated

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Migration

The Residual Net Migration for Labrador Rural Secretariat Region was -1.10% (-290 individuals) in 2011. For the Province, it was 0.56% (2895 individuals) in 2011. Net migration using the residual method is calculated by subtracting the current population from the population in the previous year and then removing the affect that births and deaths has on the population. By doing so, the remainder/residual is the number of people who migrated into or out of the area.

In Labrador Rural Secretariat Region, 16.6% of the population migrated between 2001 and 2006. For the Province, it was 14.0%. These migrants are movers who, on Census Day, were residing in a different Census Subdivision five years earlier or who were living outside Canada five years earlier.

Marital Status

Information about legally married, widowed, divorced, separated person or persons who were never legally married is unavailable for Labrador Rural Secretariat Region in 2011.

In Labrador Rural Secretariat Region in 2006 there were 10,540 legally married (not separated), 805 widowed, 1,160 divorced, 470 separated, 13,415 single people (never legally married). It should also be noted that in this geography, there were 6,755 people 17 years of age or younger.

Source: Community Accounts, Rural Secretariat, NL

50.8%

39.9%

6.2% 3.1%

Marital Status Population, 2006

Single

Legally Married

Other

Widowed

50

Source: Navigate data from NL Statistics Agency

Health care 1,777Personal care 1,022Recreation 3,531

Personal insurance payments and pension contributions 3,381

Tobacco products and alcoholic beverages $1,626Tobacco products and smokers' suppliers 880Alcoholic beverages 746

Total current consumption 42,416

Personal taxes 10,677

Child care expenses 298Pet expenses 346

668

Other 943

Household furnishings and equipment 1,933Clothing 2,474

Transportation $9,202Private transportation 8,533Public transportation

Other accommodation 712

Household operation $3,245Communications 1,658

Rented living quarters 1,380 Owned living quarters 4,813 Water, fuel and electricity for principal accommodation 2,629

$57,605

Food 6,496

Average Household Expenditures NFLD (2002-2009)

Principal accommodation 8,822$9,534

$ Change/Increase from 2002

$11,008

$593

Shelter

Gifts of money and contributions 1,131

Games of chance (net) 234Miscellaneous expenditures 622

Reading materials and other printed material 165Education 554

2009Total Expenditure

$2,263$1,979$184

$1,326$469$283

$829$584$89$94$62

$403$124

$1,615$1,443$171

$513$331$648($23)

($131)

$289$200$89

($27)$72

$7,495

$2,644$748$980

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APPENDIX III – EXAMPLES OF ADVERTISING MATERIAL

54

APPENDIX IV – FLOOR PLAN

55

APPENDIX V –START-UP BUDGET

Start-Up Budget

$20,000

Owner Contribution 16,927

EXPENSES

Total Assets

TOTAL START-UP COSTS

Total Equity FinancingBank LoanLine of CreditTotal Debt Financing

TOTAL FINANCING

External Investment

FINANCINGOwner Investment

$0

$41,927

$16,92725,000

$41,927$0

0

$41,927

Holistic Nutrients

Date:May 4th, 2014Projected Start-Up Costs:

ASSETSInventory (Breeding Feedstock)Operating CapitalEquipment to purchase

$5,000

$4,5009,4506,050

$36,927

5,000Total ExpensesMarketing through IBRD

56

APPENDIX VI - BALANCE SHEET

Balance Sheet

0

GNO Grant (Green Fund) $20,000Total equity $36,927Total Liabilities and Equity $36,927

Total long-term liabilities $0

SHAREHOLDERS' EQUITYCapital investment $16,927

Other long-term liabilities 0

Taxes payable 0Other current liabilities 0Total current liabilities

LONG-TERM LIABILITIESMortgage payable 0long-term loans payable 0

0

LIABILITIESCURRENT LIABILITIESAccount payable 0Short-term loans payable 0

$13,950

FIXED ASSETS

$36,927

Fixtures 14,427Equipment 6,050Vehicles 2,500Other fixed assets 0Total fixed assets $22,977

Total Assets

Land and buildings 0

0

Startup/Operating Capital

Other current assets 0

$9,450Accounts Receivable 0Inventory/supplies 4,500

Total current assets

Holistic Nutrients

Date: May 4th, 2014Balance Sheet (Opening Day - July 1st)

ASSETSCURRENT ASSETS

Prepaid expenses

57

APPENDIX VII – INCOME AND EXPENSE STATEMENT

Income and Expense Statement

$58,400

$105,750

$47,3505,209

$42,142

024,000

1,500000

Total operating expenses

NET PROFITNet before income taxIncome tax

05,0002,4007,2002,400

Net Profit after Income Tax

$118,750

$13,000

$14,4001,500

MaintenanceProfessional feesMarketingSuppliesDeliveryTravel

UtilitiesEquipment leaseSalaries/deductionsInsuranceDepreciation ExpenseInterest

COSTSCosts of goods sold

GROSS PROFITGross profit

EXPENSESRent

Holistic Nutrients

Date: May 4th, 2014Income Statement (Projected) for First Year Ending: June 30, 2015

SALESSales

58

Income and Expense Statement

Travel

NET PROFIT

Total operating expenses $65,400

Professional fees 0Marketing 0Supplies

0Interest 0Maintenance 0

Holistic Nutrients

Date: May 4th, 2014Income Statement (Projected) for Second Year Ending: June 30, 2016

$26,000

EXPENSES

SALESSales $237,500

COSTSCosts of goods sold

GROSS PROFITGross profit $211,500

2,400Delivery 7,200

2,400

Rent $14,400Utilities 1,500Equipment lease 0Salaries/deductions 36,000Insurance 1,500Depreciation Expense

Net before income tax $146,100Income tax 16,071Net Profit after Income Tax $130,029

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APPENDIX VIII – CASH FLOW FORECAST

Assumptions

• Starting Balance of $20,000 to cover the first 6 months provided by NL Green Fund • $5000 of marketing assistance provided by IBRD • Rent of 1200 square foot facility @ $1 square foot • Utility cost of $1500/year of well-insulated facility • Electrical costs assume well-insulated location • Insurance cost of $1500/year (maximum) • All sales are based on wholesale/retail mix (1:2) • Additional chitin products will supplement cash sales, but are not built into forecasting • Production levels:

o Begins at 300 bins per month o 600 bins per month at month 3 o 900 bins per month at month 6 o 1200 bins per month at month 9

• Capital purchase to expand available bins and shelves occurs at month 6 & 9

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Holistic Nutrients

Cash Flow Forecast - First YearBins 300 300 600 600 600 900 900 900 1,200 1,200 1,200 1,200

Month Pre-Start 1 2 3 4 5 6 7 8 9 10 11 12 Totals

Receipts Frass Sales (Wholesale/Retail Mix) 0 0 0 4,000 4,000 8,000 8,000 8,000 12,000 12,000 12,000 16,000 16,000 100,000Mealworm Sales (Wholesale/Retail Mix) 0 0 0 750 750 1,500 1,500 1,500 2,250 2,250 2,250 3,000 3,000 18,750New equity inflow 25,000 0 0 0 0 0 0 0 0 0 0 0 0 25,000Loans received 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0Total Receipts 25,000 0 0 4,750 4,750 9,500 9,500 9,500 14,250 14,250 14,250 19,000 19,000 143,750

PaymentsCash purchases 0 0 0 0 0 0 0 0 0 0 0 0 0 0Payments to creditors 0 0 0 0 0 0 0 0 0 0 0 0 0 0Salaries and wages 0 0 0 0 0 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 24,000Employee benefits 0 0 0 0 0 0 0 0 0 0 0 0 0 0Payroll taxes 0 0 0 0 0 0 0 0 0 0 0 0 0 0Rent 0 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14,400Utiltities 0 125 125 125 125 125 125 125 125 125 125 125 125 1,500Repairs and maintenance 0 0 0 0 0 0 0 0 0 0 0 0 0 0Insurance 0 125 125 125 125 125 125 125 125 125 125 125 125 1,500Travel 0 200 200 200 200 200 200 200 200 200 200 200 200 2,400Telephone 0 0 0 0 0 0 0 0 0 0 0 0 0 0Postage 0 0 0 0 0 0 0 0 0 0 0 0 0 0Supplies 0 200 200 200 200 200 200 200 200 200 200 200 200 2,400Delivery 0 600 600 600 600 600 600 600 600 600 600 600 600 7,200Marketing/promotion 5,000 0 0 0 0 0 0 0 0 0 0 0 0 5,000Professional fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0Training and development 0 0 0 0 0 0 0 0 0 0 0 0 0 0Bank charges 0 0 0 0 0 0 0 0 0 0 0 0 0 0Miscellaneous 0 0 0 0 0 0 0 0 0 0 0 0 0 0Owner's drawings 0 0 0 0 0 0 0 0 0 0 0 0 0 0Loan repayments 0 0 0 0 0 0 0 0 0 0 0 0 0 0Tax payments 0 0 0 0 0 0 0 0 0 0 0 0 0 0Capital purchases 6,050 0 0 0 0 0 0 0 0 0 0 0 0 6,050

Other (Feed stock/Packaging) 4,500 0 0 750 750 1,000 1,000 1,000 1,250 1,250 1,500 1,500 2,000 16,500Total Payments 15,550 2,450 2,450 3,200 3,200 6,450 6,450 6,450 6,700 6,700 6,950 6,950 7,450 80,950

Cashflow Surplus/Deficit (-) 9,450 -2,450 -2,450 1,550 1,550 3,050 3,050 3,050 7,550 7,550 7,300 12,050 11,550 62,800

Opening Cash Balance 0 9,450 7,000 4,550 6,100 7,650 10,700 13,750 16,800 24,350 31,900 39,200 51,250 222,699

Closing Cash Balance 9,450 7,000 4,550 6,100 7,650 10,700 13,750 16,800 24,350 31,900 39,200 51,250 62,800 285,499

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APPENDIX XI – BUSINESS PERMITS/PROFESSIONAL DETAILS