DUE DILIGENCE REPORT SPRING 2021 CHRISTOPHER WEBB, CEO EMAIL
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A UTOMATION & P RODUCTION O PERATIONS TECHNOLOGIES FOR
A QUACULTURE F ARMERS
DUE DILIGENCE REPORT
SPRING 2021
CHRISTOPHER WEBB, CEO
M OBILE : 415 867 5163
EMAIL : CHRIS.WEBB@AI-CTEC. COM
C ONTENTS
COMPANY OVERVIEW ............................................................................................................................................... 3
EXECUTIVE SUMMARY OF DUE DILIGENCE FINDINGS AND DEAL TERMS .................................................................... 34
DUE DILIGENCE TEAM BIOGRAPHIES ........................................................................................................................ 37
SALES AND MARKETING REPORT ............................................................................................................................. 41
COMPETITION REPORT ............................................................................................................................................ 54
FINANCIAL REPORT ................................................................................................................................................. 75
TECHNICAL/SOFTWARE REPORT .............................................................................. ERROR! BOOKMARK NOT DEFINED.
MANAGEMENT AND REFERENCE CHECKS ................................................................................................................. 89
LEGAL REVIEW OF CORPORATE AND DEAL DOCUMENTS .......................................................................................... 90
SITE VISIT REPORTS ................................................................................................................................................. 69
FREQUENTLY ASKED QUESTIONS ............................................................................. ERROR! BOOKMARK NOT DEFINED.
INTELLECTUAL PROPERTY REPORT ........................................................................................................................... 97
EXISTING INVESTOR REFERENCE .............................................................................................................................. 98
PRODUCT/SERVICE DEMO INFORMATION ................................................................ ERROR! BOOKMARK NOT DEFINED.
POWERPOINT PRESENTATION DECK ........................................................................................................................ 99
TERM SHEET .......................................................................................................................................................... 100
Keiretsu Forum Disclaimer:
Neither Keiretsu, the Due Diligence Committee nor its members (collectively, the "Keiretsu Parties") make
any representations or warranties, either express or implied, with respect to the accompanying [due
diligence report (the "Report")]. The Keiretsu Parties disclaim all statements, express or implied, statutory,
or otherwise, including, without limitation, any implied warranties of merchantability, fitness for a particular
purpose or non-infringement. The accompanying Report is provided on an “as is” basis. Each recipient of
the Report is encouraged to work with their own attorneys, accountants, and advisors with respect to any
investment or other decision in connection with the investment opportunity that is related to or the subject
of the Report. The Keiretsu Parties do not warrant or promise that the Report is correct and complete or is
free of errors. In no event shall the Keiretsu Parties be liable to you or any third party for any indirect,
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loss of principal, profits, revenue, data or use, incurred by you or any third party, whether in an action in
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the possibility of such damages.
Company Summary
Ai Control Technologies Inc
A Truly Unique Opportunity
EXECUTIVE TEAM INVESTMENT OPPORTUNITY:
Chris Webb -Tremendous opportunity to invest in first-to-market, patented protected, buoyancy depth control
Co-Founder aquaculture technology
Executive Director -Investor return projected in 2026 at of over 10x ROI (future value circa $150m)
Wayne Francis PROBLEM:
Director of Engineering - With over 90% of seafood imported, our oceans and inland waterways that had previously
Rick Baker been off-limits due to inherent inefficiencies combined with the extreme volatility and
Interim COO dangers, such aquafarming now presents an untapped opportunity.
Jim Green
Interim CFO
Tim Matuszewski
General Manager
East Coast
INDUSTRY
Category: Clean Tech
Sub-category: Artificial
intelligence,
autonomous
computing systems,
marine aquaculture
technology
CURRENT EQUITY SOLUTION & TECH:
INVESTORS -“Autonomous Buoyance Technology” proprietary, patent-protected, cloud-based, easy-to-
Founders operate technologies to remotely and locally control, regulate, monitor buoyancy levels and all other
key farming functions.
FUNDING TO DATE
-Our products feature extensive ecosystem monitoring allowing optimization and are paired
$1 million with proprietary, ingeniously designed, submersible, inherently scalable, portable habitats
constructed from, ultra-lightweight, high density polyethylene, uniquely suited and specifically
FINANCING designed for raising marine-livestock and aqua-botanicals that can be deployed in select
SOUGHT waterways and ocean settings anywhere in the world.
$1n Convertible Note
$2m Grower Fund VALUE PROPOSITION:
- We enable aquaculture growers to substantially improve productivity by leveraging our
USE OF remote and local autonomous smart habitats for raising marine livestock and aqua botanicals
PROCEEDS in inshore & ocean (federal) waters. There is potential for a typical Mississippi oyster farmer
Deployment of to increase revenues from $4.3m to $9.4m and increase EBITDA from $1.8m to $4.5m based
technology in on our first model trials partner analysis.
commercial scale -Sustainable, safe, abundant, reliable, and unlimited new sources of eco-seafood and aqua-
offshore pilots with botanicals to feed the appetites of at least two major high-growth industries – seafood and nutritional
large Shellfish (Oysters supplements. A living, persistent, R&D lab without borders or limits that is continuously and actively
& Mussels) farmers. updated through machine learning, and advanced AI learning.
BANK COMPETITION & COMPETITIVE ADVANTAGE:
Chase Bank -AICT’s Autonomous Buoyancy Control Systems are first-to-market products, underpinned by
patented technology and the most advanced underwater aquaculture control system in the market.
LAW FIRM They enable an operator to preprogram, automate and remotely control depth, descent/ascent
Akana Ma, Esq. – rates, level hold and emergency protocols, thereby greatly increasing productivity, safety,
efficiency, precision, and functionality across a variety of marine applications. These unique
Buchalter-AterWynne
features are backed by two U.S. patents (with additional patents pending) and do not exist in any
other product on the market, allowing investors to own and us to secure AICT’s competitive and
ACCOUNTING
first-to-market advantage. 5 years and over $2 million invested in technological research,
FIRM prototype development and Q&A testing, resulting in a product that is now ready for matched trials
Garry M Kaplan, CPA and performance validation in customer ocean farms.
Management Team Biographies Christopher Webb Founder + CEO + Entrepreneur – Angel Investor – Inventor Christopher Webb joined Keiretsu Forum in spring 2020. He is a solutions-focused Senior Executive, Entrepreneur, and Business Owner with more than 30 years of success across the manufacturing and retail industries. Leveraging extensive international experience with product development, innovation, growth, and scaling on a global basis, he is a valuable adviser for an organization that is looking to expand through mergers and acquisitions. His broad areas of expertise include global expansion, acquisition, strategic partnerships, growth, analysis, clarification, and execution of strategy. Throughout his executive career, Christopher has held leadership positions with AI Control Technologies Inc, Pandora Underwater Equipment SA, Kingfisher International, ICI Paints, and Chris Webb Consultancy Services He loves helping early stage and late-stage companies to achieve their strategic and growth goals. Christopher provides awesome leadership, mentoring, advice and has a high success track record of profit enhancement in mainstream, new-venture, and turn-round situations. Inventor with four patents issued. Very analytical (left brain) and creative (right brain). MBA and Degree in Industrial Chemistry and lives with his wife, Jean in Ocean Springs, Mississippi.
Tim Matuszewski General Manager, East Coast Tim serves as General Manager for Ai Control Technology and also Co-Founder of Boston based, Aquaculture Productivity Innovations, LLC. Tim is an innovative and performance driven entrepreneur with a successful track record in building start-up technology companies to acquisition and strategic mergers. He has held senior leadership and executive positions with start-up technology consulting firms to global professional services companies (i.e., FTI Consulting, E&Y, Ricoh, McGraw-Hill, Bowne & Co., Litigation Logistics). With over 30 years of professional experience, Tim is responsible for profitable revenue growth, business and sales strategy, new client development, technology strategy & implementation and business advisory services. Tim received his Bachelor of Science degree (Psychology, International Honor Society) from Michigan State University and currently resides in Boston, MA with his wife, Alicia.
Wayne Francis Director of Engineering Wayne Francis is a highly experienced systems engineer, and on loan to us as Director of Engineering from NVision Solutions Inc. While Principal Systems Engineer at SAIC from 2009-2013, Wayne was the systems engineering lead for the successful capture of the $60M DARPA Phase 2 Anti-Submarine Warfare (ASW) Continuous Trail Unmanned Vessel (ACTUV) and established the cross-disciplinary systems engineering processes for the development of the first SubHunter vessel. Under separate DARPA initiatives, Wayne has coordinated the engineering teams responsible for development and deployment of long mission, unattended, ocean-floor, sensing systems. From 2000-2009, Wayne established the electronics production capability at Planning Systems, Inc, Long Beach, MS engineering facility, transitioning to a AS9100-certified development and fabrication process group in 2008 as a part of QinetiQ North America’s Technology Solutions Group. Under the Precision Air Delivery System (PADS) program, Wayne directed production of $40M over three distinct electronic assemblies transitioned through Department of Defense (DOD) acquisition milestone C. Recently, Wayne developed the test and measurement regimes for both the airborne and unattended ground systems of the QinetiQ and LogLinear Group Wind Profiling Portable Radar (WiPPR).
Rick Baker Director of Operations Baker is the former CEO of eCorporation, Inc., a leading venture backed technology incubator headquartered in Lexington. eCorporation launched 15 dot coms including, Cyberia Music, YouSendit, Edulab, ConnectedCampus, Travelago and Rovion. The company grew from 3 employees to 166 employees during that time period. A long-time environmentalist, Baker created several water saving inventions that were distributed in the US, Israel and throughout Europe. He is the author of best-selling book, “The 7-Minute Organic Garden” and the eco-thriller, “The Life Engine”. He attended Morehead State University, The University of Kentucky, the Rochester School of Music and The Chicago Culinary Institute (CCI).
Jim Green Director of Finance Green is an accomplished financial executive with a proven ability to implement financial strategies and processes that lead to higher net income, positive cash flow and attractive ROI. He served as an executive and consultant (Director of Accounting & Financial Outsourcing) at a regional public accounting firm. In that role, Mr. Green helped closely-held businesses move to the cloud in order to take advantage of accounting automation tools – saving clients significant time and money. He also served as interim CFO for Kentucky One Healthcare System.
Company Investment Opportunity & Overview Investment Opportunity Tremendous opportunity to invest in an innovative, first-to-market, patent protected aquaculture technology solution with potential to deliver over 10x ROI for investors. (future value circa $150m). Overview Ai Control Technologies Inc. (hereinafter also referred to as ‘AiCT’ or ‘the Company’) and its sister company, Marine Depth Control Engineering LLC (hereinafter also referred to as ‘MDCE’), are marine technology companies involved in technology development, commercialization, marketing, and distribution of autonomous buoyancy control systems. While MDCE specializes as a technology holding company for patents, and trademarks. AiCT technologies includes air and water managed autonomous depth control systems for extensive application across four verticals – aquaculture, marine construction, military, and government applications. AiCT was incorporated as a C-Corporation under Florida state laws on January 4, 2016. Christopher Webb is the majority shareholder, Founder, and CEO of AiCT. Mr. Webb is an avid scuba diver and one of the inventors who contributed to the patent portfolio recently valued at over $150M. This AiCT patent portfolio covers the AutoDiveTM (AutoDive) system and its components. AutoDive systems use a common engineering technology with application-specific software to automate manual depth control processes across four markets (aquaculture, marine construction, military, and government). AutoDive addresses a critical need for technology- driven operations to improve growth, efficiency, precision, functionality, safety, and allow import substitution. We are offering a $1m convertible note with 10% pm coupon deferred and 20% discount, premium position, with Series A preferred capital raise of $5M but flexible on all terms. These funds will be used to deploy our developed technologies in real farmer/customer field matched trials alongside current operating habitats. The United Nations Food and Agricultural Organization (FAO) estimates that currently more than one half of the world’s seafood consumption comes from aquaculture. Currently, the United States (US) imports, the vast majority of its seafood, much of which is produced in countries with fewer environmental regulations than American consumers and policymakers demand of domestically produced seafood. Furthermore, US wild capture fisheries have limited ability to expand to meet the increasing demand for seafood given the requirements under the Magnuson-Stevens Act for sustainable fisheries. The United Nations has identified the United States as having the greatest world potential for ocean farming within our Exclusive Economic Zone (EEZ), which is the largest in the world. Further, the United Nations’ FAO has warned that the US must double our aquaculture production by 2030 to just maintain our current levels of seafood consumption! For the US, aquaculture represents the single greatest opportunity to provide domestic, healthy seafood; create jobs; contribute to coastal economies; and bridge the growing gap between supply and demand for additional healthy sustainable seafood. We envision our environmental technology as key enabling technologies and the next step forward in sustainable, safe, and profitable American aquaculture.
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