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THE ECOCHLOR ADVANTAGE:
STEVE CANDITO, CEOECOCHLOR
Strategies For Raising Capital in a Regulatory Driven Market
• Joint Venture / Public Company Subsidiary• Startup• Two Large Oil Company Clients• Debt with warrants
• Private Equity• Carve Out• Initial 60/40 Equity Debt Funding• Additional M&A 100% Debt
• Angel Investors / Venture Capital• Startup• Family & Friends• Retail Equity Raise• Convertible Notes• Client Equity Funding
Capital Alternatives
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Common Theme:Client Funding Support
• Best-in-class technology with IMO and USCG Type Approval
• Early entry into the ballast water management system (BWMS) marketplace
• Blue chip customer base with largest shipowners in the world
• Asset-light business model
• Ideal platform to execute substantial growth opportunities
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Market PositionEcochlor has sole market
ownership of the patented chlorine dioxide ballast water
management technology.
Competition
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Market OpportunityEcochlor has a unique offering to the BWMS marketplace and is positioned as a leader in quality, reliability and service.
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Ecochlor’sAfter Sale
MarketRetrofit Market7 Year Span
Demand is high for rapid revenue growth, substantial and
sustained long-term profitability.
Newbuild & Equipment
ReplacementMarket
Shipowners are more focused on BWMS
quality and compliance than lowest price.
Annual reoccuring revenue growth in
service, resupply and spare parts.
FUNDING PHASES
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Phase 1Seed Funding
• Research and development of treatment technology
• Equipment prototype
• Testing
• Market research
Phase 2Angel / Client Support Funding
• Additional research and development of treatment technology
• Manufacturing and 3rd party vendor collaborations
• Shipboard testing
• Regulatory type approvals
• Market positioning
• Professional staffing and global offices
Phase 3Institutional Funding
• Investing in global infrastructure and capacity to service and resupply in-service systems
• R&D to develop a lower-cost version of the BWMS
• Completion of an international training facility
• Working capital to fund the production ramp-up and additional staff
Funding Strategy
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From seed to growth, key phases in Ecochlor funding within a government regulated industry.
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Timeline
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Benchmarks of Ecochlor’s growth and development.
Timeline
Ecochlor’s ClO2patent is approved
Ecochlor receives USCG Type Approval
Ecochlor’s 1st ship BWMS retrofit Ecochlor receives USCG
AMS Approval
SCF Group
ISH/Seacor
2004 2016
BWM Conventionadopted by IMO
2001 2003 20082006 2013 2017 2018 20192015
Liberty Maritime
Ecochlor’s clients accepted into USCG STEP Program
Angel Fundraising
Angelicoussis
Scorpio Tankers
Minerva Marine
Alaska Tankers
EARLY ADOPTERS MARKET LEADERS
Ecochlor is founded
2014
Convertible Notes Client Equity Funding
Ecochlor receives IMO Type Approval
BWMS Convention ratified
Ecochlor’s 2nd & 3rd ship BWMS retrofit
Institutional Fundraising
Retail Equity Raise
Ecochlor starts USCG testing
• Extremely high risk, reward timeline not discernable
• Chlorine dioxide (ClO2) had been used safely and effectively in pulp and paper water treatment applications for over 60 years and was the basis for the Ecochlor treatment technology and in the application for patent to be used in the maritime industry. Patent: Chlorine Dioxide BWTS; #6,773,611; Year 2004
• Product research and development
• Manufacturing and 3rd party vendors were lined up for custom one-off production – a prototype was produced
• Proof of concept needed - market research for product feasibility and industry acceptance
• Early phase of competitive market – options extremely limited
Time Period: 2001 - 2003
Phase 1: Seed Funding
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Pulp and paper water treatment application.
• Reduced risk – proven concept, regulations firming, newbuilds will now require BWMS
• Shipowners were cautious about retrofitting their vessels without regulatory enforcement and confusion in the guidelines for compliance
• Early adopters start retrofits prior to ratification of BWM Convention and Ecochlor’s USCG Type Approval
• Competition increased significantly with UV and electrochlorinationmanufacturers (>60), but remained small with chemical injection manufacturers (2)
• Testing continued for IMO and USCG Type Approvals along with DNV GL, ABS, LR, NK, BV, Hellenic, Liberian, RMRS and Cyprus
• Ecochlor opened offices in Maynard, MA; North Haven, CT; Limassol, Cyprus
Time Period: 2003 - 2018
Phase 2: Angel / Client Funding
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• Firm order backlog set basis for fact-driven forecast enables institutional investors to quantify risks and valuation
• Proven technology through in-service working BWMS on vessels and strong customer base
• Competitive shake out in BWMS manufacturing companies due to delay in ratification and high cost of regulatory testing – Ecochlor positioned as a leader in the industry
• Regulatory risk is reduced due to compliance deadline enforcement with penalties
• Company track record of receipts and payments creates more certainty regarding cash flow forecast
• Investments for growth well-defined
Time Period: 2018 - current
Phase 3: Institutional Funding
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With many regulatory issues now resolved and deadlines for shipowners fast approaching, the market for ballast water management systems (BWMS) has finally arrived. Ecochlor is strongly positioned as a front-runner in the large capacity segment of the industry. This milestone reflects all the hard work achieved by the staff and our supporters.
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SummaryEcochlor’s funding mirrored the risks
profiled in the development timeline. Now, with demand high and the
company positioned for rapid growth, we are in a strong position to work
with institutional investors to bring us to the next level.
