Meil 201507
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Transcript of Meil 201507
METHES ENERGIES INTERNATIONAL LTD.
Corporate OverviewJuly 2015
All figures quoted in U.S. Dollars
Forward Looking Statements
This presentation has been prepared by the company and includes information from other sources believed by management to bereliable. No representation or warranty, express or implied is made as to the accuracy or completeness of any of the information setforth herein. This presentation may contain summaries of the terms of certain documents and agreements, but reference is made to theactual documents and agreements for the complete information contained herein. The information contained herein is as of the datehereof and is subject to change, completion or amendment without notice.
This presentation contains statements, estimates and projections with respect to the anticipated future performance of the companythat may be deemed to be “forward‐looking statements.” These statements, estimates and projections reflect various assumptions madeby the company concerning anticipated results, which may or may not prove to be correct. All statements contained in the presentationthat address operating performance, future direction, management and control of the company, events or developments that areexpected to occur in the future (including statements related to earnings, expectations, sales of assets, capital expenditures, orstatements expressing general optimism about future operating results) are forward‐looking statements. Actual results could differmaterially from those reflected in the forward‐looking statements contained herein as a result of a variety of factors, many of which arebeyond the company’s control.
The Company is in the development stage and to date has generated limited revenue. In the future the Company may not be profitableand the securities offered by the Company may, ultimately, have little value. Methes Energies International Ltd. trades on NASDAQCapital Market under the symbol “MEIL”.
This is not an offering of securities. Any such offer must be accompanied by an Offering document.
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Epoxidized Soybean Oil (ESO)Natural Polyol
MEIL Investment Highlights
Provides exposure at different points of the value chain in an evolving industry
Multiple revenue streams including commodity sales, services and royalties
Higher margins, reduced dependence on government production subsidiesLow‐cost biodiesel production
Robust Competitive Advantages to Fuel Continued Growth
High level of expertise in all business aspects from R&D, to solution development & sales Experienced management team
Company focuses on core business of production, R&D and ancillary servicesOutsourced manufacturing
A powerful new pre‐treatment process with recurring revenues from the sale of PP‐MEC
Introduced, in August 2014, “game‐changing” technology
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Provides blenders with a unique alternative to buying from large‐scale producers
Clients require little to no biodiesel experience of their own
Adding 2 new bio‐based, high value product, in Q3 2015
• Methes Energy International Ltd (“MEIL”) was founded in 2004
• MEIL has designed and built the first fully automated, compact, state of the art continuous flow biodiesel processor
• MEIL owns one production facility in Sombra, Ontario with a nameplate capacity of 13 MMGPY– Sombra, ON facility registered with EPA (biodiesel eligible for Renewable
Identification Number “RIN” generation)– Sombra production registered under California Low Carbon Fuel Standard
(LCFS) program
• Start production (in Q3 2015) of 2 new bio‐based: Epoxidized Soybean Oil (ESO) and Natural Polyol
• The company also sells its biodiesel processors, pre‐treatment technology and provides support services
Company Overview
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Corporate Structure
Business Lines
Operating Entities
MEIL Corporate
Methes Energies International Ltd.NASDAQ: MEIL
Methes Energies USA Ltd.
Import Biodiesel to U.S.Market Biodiesel in U.S.RIN GenerationRIN TransactionFeedstock Collection
Methes Energies Canada Inc.
Biodiesel Producer Laboratory ServicesMarket Biodiesel LogisticConsulting R&DEquipment Provider IT / Software ServicesEngineering ESO & Natural Polyol
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• Biodiesel is a clean‐burning, biodegradable and renewable fuel
• It is produced by reacting feedstock with short‐chain alcohols (methanol or ethanol) – Potential feedstock includes vegetable and seed oils, waste vegetable oil, animal fats, algae and sewage
sludge
• Biodiesel can be used in pure form or be blended with petrodiesel and used in most modern injection pump diesel engines
– Blends of 20% biodiesel (B20) or less can be used in conventional diesel equipment with little or no modification
• Use of biodiesel keeps engine performing better and cleaner– Provides increased lubricity over ultra‐low sulfur diesel which protects fuel systems and extends life– High cetane level leads to more complete combustion of fuel increasing engine responsiveness
What is Biodiesel?
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The US Market for Biodiesel
• Through the Renewable Fuel Standards program (RFS), the United States Environmental Protection Agency (“EPA”) has legislated the use of 1.7 billion gallons of biodiesel in 2015
US Biodiesel Mandate
0
0.5
1
1.5
2
2.5
2010 2011 2012 2013 2014 2015 2016 2017
Man
dated Use of T
otal Biodiesel
(billion gallo
ns)
Source: United States Environmental Protection Agency
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0
5
10
15
20
25
30
2005 2007 2009 2011 2013 2015 2017 2019 2021
Biod
iesel (litres in billion
s)
Trade Balance
Source: OECD‐FAO Agricultural Outlook 2013 ‐ 2022
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Company’s Diversified Revenue Streams
Sales of biodiesel produced by MethesBiodiesel Sales
Sales of “game‐changing” pre‐treatment technology and catalyst (a consumable)PP‐MEC Catalyst
Sales of Denami biodiesel processors Equipment
Software license fees paid by Denami operatorsRoyalties
Sales of inputs to Denami operators as well as production by‐products
Feedstock and commodity sales
Per‐gallon incentive paid by Canadian government under the ecoENERGY programGovernment Incentive
Licensing of SAP‐based accounting and inventory‐tracking packageSoftware Licensing
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Sales of Epoxidized Soybean Oil (ESO) and Natural Polyol (Q3 2015)Bio‐based Products Sales
MEIL Production Facility
Equipment: 2 × Denami 3000Capacity: 13 MMGPY(1)
Commercial Ops. Date: 2013Revenue: $52 ‐ $60 MM per year(2)
Used for biodiesel production, storage and transloading
Potential to double production of biodiesel using the two existing Denami 3000s
Sombra, Ontario
(1) Nameplate Capacity(2) At full production ‐ 9 ‐
Located a few minutes from the USFour rail spurs on site (40 railcars)Set up for rail and truck deliveryCurrently using only 30% of the site
• Operations and Maintenance contract• Sale of feedstock and other input commodities• Sale of customers’ output in US and Canada• Feedstock tracking software to ensure compliance with EPA Quality Assurance Program
Technology Portfolio
Fully Automated, Modular and Scalable
Footprint: 11’ × 16’
One operator
Output: 1.3 MMGPY
Price: $980,000
Gross Profit: $190,000
Revenue: $5 MM/yr(1)
Fully Automated, Modular and Scalable
Footprint: 22’ × 16.5’
Eight operators
Output: 6.5 MMGPY
Price: $3.50 MM
Gross Profit: $2.00 MM
Revenue: $26MM/yr(1)
Denami 600 Denami 3000
Ancillary Services
(1) At full production ‐ 10 ‐
MEIL’s Technological Advantage
Provides capacity flexibility and profitability for a wide range of potential producersScalable, modular and flexible solution
Ensures integrity of product for large US market, assisting in QAP complianceProprietary feedstock tracking software
Enhanced safetyLow operating temperature and pressure
Input flexibility not available with competing biodiesel production technologyAbility to use wide range of feedstock
Denami Advantages
Lower labor requirement, can be remotely monitored with 24/7 continuous production
Fully automated and computerized system
Reduced CapEx to establish production facility
Fast‐to‐market (16 weeks vs. 26‐52 weeks)
Denami solution requires few input chemicals reducing corrosion
Proven technology with quality Ontario‐based manufacturer
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• Over a Billion dollars market in North America• Sombra is equip to produce both products. Can go back to biodiesel within 3 weeks!• Retained Omni Tech International Ltd – a leading consulting firm in bio‐based product
Epoxidized Soybean Oil & Natural Polyol
Bio‐based Specialty Products
There is more
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• A simple yet revolutionary process – a true “game‐changer”• Fast reaction time – 5 to 15 minutes compared with2 to 8 hours !• Exclusively manufactured by Dorf Ketal – a well known specialty catalyst manufacturer
Pre‐Treatment Technology / PP‐MEC Catalyst
PP‐MEC Catalyst
There is more
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2014– Bring Sombra to name plate capacity of 13 MMGPY (done)– BQ9000 certification as Producer and Marketer (done)– Sombra facility accreditation for California LCFS (done)– Introduction of PP‐MEC and new pre‐treatment technology (done)
2015 and beyond– Sale of Denami 3000 processors– Sale of pre‐treatment system and PP‐MEC catalyst– Production of Epoxidized Soybean Oil & Natural Polyol– International expansion to Europe, South America and Asia
Key Milestones
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Management
Chairman & CEO• Former military engineer with 6 years
business development experience in Europe• Founded asset management firm in 1992• Most recently acted as President and CEO of
a US publicly traded company involved in the solar industry in China
CFO• 25 years experience with NASDAQ listed
companies• Served as CFO of Naugles Inc., Gucci
Timepieces• Former Managing Director of Phoenix
Management Group LLC
President & Co‐Founder• Over 9 years experience in biodiesel• Software development and financial
expertise • Designer of Denami operating software as
well as feedstock‐tracking software
VP Operations & Co‐Founder• Over 9 years experience in biodiesel• Hands‐on engineering and R&D expertise• Designer of Denami hardware
Michel Laporte
Edward Stoltenberg, CPA Johann (John) Loewen
Han Swoong (Nicholas) Ng
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Board of Directors
Independent Director• Senior Vice President at SNC Lavalin• Formerly Senior Vice President for Africa
Infrastructure & Construction at SNC Lavalin• Chair of Compensation Committee• Masters in Chemical/Environmental
engineering
Independent Director• President & CEO of Terrajay Holdings
Energy Consultants• Extensive experience in financing and construction of
renewable energy production facilities in Ontario• Over 10 years experience in energy and environmental
policy at Federal and Provincial level
Independent Director• 25 years management and advisory
experience in waste water treatment• Extensive list of publications in chemical
and environmental engineering• Ph.D. in Environmental Engineering and
M. Tech in Chemical Reaction Engineering
Kebir Ratani
John Pappain
Perichiyappan Senthilnathan
Independent Director• Extensive experience in business planning and
restructuring in the manufacturing industry• Board experience with large multinational US
manufacturing companies• Chair of Audit Committee
Anthony T. Williams, CPA, CA
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MEIL Trading, Valuation and Ownership Structure
13.8MMShares Outstanding
MEILSymbolNASDAQExchange$0.33 ‐ $2.1052 Week Range
$4.1 MMMarket Capitalization
NASDAQ: MEIL
Source: NASDAQAs of July 13, 2015
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Share Information
16.3%Management
19.1%Institutional
64.6%Retail
Ownership Structure
Epoxidized Soybean Oil (ESO)Natural Polyol
MEIL Investment Highlights
Provides exposure at different points of the value chain in an evolving industry
Multiple revenue streams including commodity sales, services and royalties
Higher margins, reduced dependence on government production subsidiesLow‐cost biodiesel production
Robust Competitive Advantages to Fuel Continued Growth
High level of expertise in all business aspects from R&D, to solution development & sales Experienced management team
Company focuses on core business of production, R&D and ancillary servicesOutsourced manufacturing
A powerful new pre‐treatment process with recurring revenues from the sale of PP‐MEC
Introduced, in August 2014, “game‐changing” technology
‐ 18 ‐
Provides blenders with a unique alternative to buying from large‐scale producers
Clients require little to no biodiesel experience of their own
Adding 2 new bio‐based, high value product, in Q3 2015