Verde Investment Highlights
Financial Forecast (Verde's Standalone P&L)
Basis for the Financial Forecast for the First Two Years:
Financial Forecast ($M)
("Yr" pegged to the time of transaction closing)*
Yr 1
H1
H2
Yr 2
Revenue
11.5
1.1
10.4
60.0 -80.0
•
Analysis and Highlights
TLGY
Subject to raising
expansion
capital of at least
$15M by the
beginning of Yr 1
H2 (i.e., at the
closing of the
Proposed
Transaction)
Analysis of the sales pipeline and best estimates of projected volumes and project
commencement dates in arriving at the revenue forecast.
Need to raise at least $15 million in net proceeds to expand current capacity beyond a monthly
sales cap of $5 - $7 million. Hence, the Yr 2 forecast is subject to adjustment based on this
monthly cap if capacity expansion is delayed due to lack of capital.
Forecast is supported by current pipeline of prospective customer sales of over $250 million
(~$150M after TLGY adjustment), which we believe will continue to grow. Expected projects with
these potential customers, which include Fortune 500 corporations, multinational plastic players
and packaging companies, are at various stages of product development.
Since March 2023, Verde has received initial purchase orders and written commitments from >10
large customers, including leading sports league and plastic chain market leader.
We conducted various potential customer interviews to assess the progress of development
projects and their intention to move forward with PolyEarthlyene™.
We conducted commercial and technical due diligence that includes on-site product testing,
validation of near-term commercialization potential, verification of product performance, pricing,
and customer interest, and trial business development through our own industry network.
Recently announced partnership with Vinmar America, a leading global distributor of plastics, will
enable Vinmar to promote PolyEarthylene TM to Vinmar's customers; concrete customer traction
with few dozen leads / initial orders already generated just in the first few months.
Price analysis on commodity plastics and alternatives to verify that PolyEarthylene ™ is
competitively priced at $1.80 per lb (expect to reach $1.50 per lb at scale)
A cost analysis of key material costs were provided by the management, as a support for the
margin forecast. These materials include GreenPE, regular PE, starches, calcium carbonate and
other additives.
Analysis of labor cost assumptions (~10% of total product cost).
Gross Profit
5.1
0.5
4.6
28.8 - 38.4
Gross Margin (%)
44.4%
44.4%
44.4%
48.0%
EBITDA
-3.3
-2.6
-0.7
9.0 15.8
Expected solid profitability from Yr 2 due to strong margins and relatively low costs of operation.
Profitability expected to increase as volume increases and expenses scale.
EBITDA Margin (%)
NM
NM
NM
15%-20%
Note: The financial forecast is dependent on the closing date of the Proposed transaction ("T") due to capital requirement. Therefore, in above Year 1 represents the 12 month period from T minus six
months (T-6) to T plus six months (T+6), where T is the closing date of the Proposed Transaction. Yr 2 from T plus six months (T+6) to T plus eighteen months (T+18) For example, if the Proposed Transaction
were to close on December 31, 2023 then Year 1 would be between July 1, 2023 to June 30, 2024.
Verde
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