This Is a Once in a Lifetime Opportunity to Participate in a Breakout Revolutionary Green Investment.
The Offering
- Securities offered:– One Unit - One unit is one vote in the JV. Each subscriber must buy a minimum of
One Unit.
- Initial Unit :The first 40 unites in the JV
- Will cost $300,000 a unit, and raise $12 million in capital.
- Each unit will receive a series “A” Debenture for $300,000 at 3% in the JV,
- Each unit will also receive 600 common shares in the Company for a total of 24,000 common
shares.
- Standard Unit All following units in the JV - estimated at 134 standard units
- Will cost $450,000 a unit and raise $60.3 million in capital.
- Each unit will receive a series “B” Debenture for $450,000 at 2% in the JV,
- Each unit will also receive 450 common shares in the Company for a total of 60,300 common
shares.
- Will cost $300,000 a unit, and raise $12 million in capital.
- Each unit will receive a series “A” Debenture for $300,000 at 3% in the JV,
- Each unit will also receive 600 common shares in the Company for a total of 24,000 common shares.
- Standard Unit All following units in the JV - estimated at 134 standard units
- Will cost $450,000 a unit and raise $60.3 million in capital.
- Each unit will receive a series “B” Debenture for $450,000 at 2% in the JV,
- Each unit will also receive 450 common shares in the Company for a total of 60,300 common shares.
The Project
This project will be undertaken in two phases.
- The first phase is the "Pilot Plant".
- The second phase is to build larger and larger cold engine power plants.
Some details on the project extracted from the Private Offering Memorandum
2.2 Our Business
The Cold Engine is an engineering concept that employs two existing but well established technologies to extract heat from ambient air using a heat pump and transferring that heat into a turbine for power generation. By adding a generator to the turbine, electricity will be generated. The marriage of these two different, but well established technologies creates the foundation for the Cold Engine. By way of example, a Cold Engine Power Plant would be similar to the refrigeration system found in many ice rinks coupled with a turbine and generator.
Much of the research and development of the Cold Engine concept has been accomplished by Turbo Gen Power Ltd. and its founder, David Graham. See "Item 2.3 – Development of Business". By licensing this intellectual property pursuant to the License Agreement, the Company will be able to focus on development of the First Cold Engine Prototype, and addressing the hurdles that arise during this development. Assuming the First Cold Engine Prototype proves to be successful, the Company intends to develop additional Production Prototypes, with the goal of developing Production Prototypes capable of producing an aggregate of 10 to 18 megawatts of electricity. These Production Prototypes would not only provide a potential source of revenue to the Company (through the sale of electricity generated, if any), but they would also be used by the Company as a marketing tool to commercialize the Cold Engine.
Phase 1 – The First Cold Engine Prototype
Initially, the business of the Company will be primarily related to further research and development of the Cold Engine technology and the development of the First Cold Engine Prototype. This prototype will be endurance tested under various test conditions and modified for the purpose of maximizing power produced (if any) and optimizing engineering parameters. This will allow the Company to then assess the viability of the Cold Engine as a source of electricity with the goal of proving the Cold Engine concept.
Except for the turbine, a Cold Engine is primarily comprised of components which can be acquired from manufacturers and suppliers. Accordingly, a large aspect of the development of the First Cold Engine will be related to the acquisition and assembly of these various components. The Company intends to have Cimco design and build the refrigeration component of the cold engine. Cimco has informally indicated that it will assist in this regard. Currently, the materials and parts necessary for developing the First Cold Engine Prototype will be readily available.
The turbine for the First Cold Engine Prototype will be designed by the Company. Once designed, the Company will engage a third party to build it based on the Company's specifications and drawings. Once built, it along with the other components of the First Cold Engine Prototype will be assembled by the Company. Management intends to carry out this assembly at Cimco's facility in Edmonton, Alberta.
Following assembly of the First Cold Engine Prototype, the Company will proceed with testing, which the Company also intends to carry out at Cimco's facility in Edmonton, Alberta. Testing will primarily be done with a dynamometer. However, the Company will also write computer software to both run and test the Cold Engine Prototype. Based on test results, the First Cold Engine Prototype (including its turbine) will be modified, calibrated and further tested. This process will be repeated until the Company believes that it has optimized engineering parameters for maximum power output (if any). The majority of modifications will be done by the Company, except with respect to the turbine. Where the turbine is to be modified, it will be carried out by a third party according to the Company's specifications.
Based on management's current understanding of the concept of a Cold Engine, management intends to build the First Cold Engine Prototype under the assumption that it will be capable of generating 200 Kilowatts of power. However, management believes it can be built to be, and intends to build it so that it can be, upgraded to generate 1 megawatt of electricity. Regardless however, it will be considered by management to be a success if it converts 40% of ambient heat into power and produces at least 120 Kilowatts of electricity.
If the Company is successful in obtaining its power production objective with the First Cold Engine Prototype, a generator (along with various other components such as a reducer and transformer) will be added to construct a Cold Engine Power Plant (the "Pilot Plant"). Except for the reducer (which is built by the Company) these components will also be sourced from third party suppliers, and they will be purchased based on the output capacity (including any potential upgraded capacity) of the First Cold Engine Prototype. The intent is to then connect the Pilot Plant to the Grid at Cimco's facilities in Edmonton, Alberta for display and demonstration purposes. Although no formal agreement exists with Cimco in this respect (or any other respect), they have informally provided their consent.
To successfully implement Phase 1, the Company will also need obtain consent from the Alberta Utilities Commission under the Electric Utilities Act (Alberta). See "Item 2.2 – Industry Regulation". Assuming Phase 1 is successful, and assuming the Pilot Plant is capable of generating 200 kilowatts of power, the Company is expected to generate approximately $150,000 per year in revenue. However, this is based on numerous assumptions, including, among other things, 75% of continuous operations of the Pilot Plant, the Company is able to sell the all electricity generated on the Grid from the Cimco facility in Edmonton, Alberta, and such electricity is sold at an average price of not less than $0.07 a Kilowatt - hour. See "Item 8 – Risk Factors".
In developing the First Cold Engine Prototype, the Company will have relatively nominal overhead as it will not need to lease any commercial or industrial space, and, other than management, its labour requirements will be relatively low (intending only to hire/contract an engineer design technician, draftsman, mechanic and clerical assistant). Further, the members of the management team have all agreed to accept reduced compensation in the first year of development.
Phase 2 – Production Prototypes
Subject to satisfactory results from Phase 1, the Company intends to design, construct and test successively larger (in terms of size and electricity generating capabilities) Cold Engines (each referred to as "Production Prototypes" under Phase 2). Production Prototypes will be built, tested and modified in a manner similar to the First Cold Engine Prototype. See "Item 2.2 – Our Business – Phase 1 – The First Cold Engine Prototype". Mainly, a Cold Engine turbine will first be designed by the Company, manufactured by a third party based on the Company's plans and specifications, and subsequently tested by the Company with the intent of optimizing engineering parameters and maximizing power produced (if any). Based on these engineering parameters, the Company then intends to have manufactured a sufficient number of turbines (which it anticipates to be between three and six) with the intent of building Production Prototypes (and Cold Engine Power Plants) capable of generating 10 to18 megawatts of electricity. Based on management's current understanding, it believes that this will require that the Company build three to four Production Prototypes, each with an electricity generating capacity of three to four megawatts. However, until further testing and development is done, there is no assurance that this will be the case. See "Item 8 – Risk Factors".
Depending on the number and size of Cold Engine turbines actually manufactured, the Company will then acquire appropriate components (such as an evaporator, compressor, condenser, piping and other refrigeration parts and equipment) to assemble with the turbine(s) to construct one or more Production Prototypes of the Cold Engines. These Production Prototypes will then undergo testing and modifications for optimization purposes. Once optimized, but subject to results, the Production Prototypes would be connected to a generator (along with various other components such as a reducer and transformer) and the resulting Power Plant connected to the Grid for field testing.
If the Company is successful in developing Cold Engine Power Plants with a total generating capacity of 15 megawatts of electricity, management expects to generate gross sales revenue of approximately $7,000,000 per year by supplying the electricity to the Grid. However, this is based on numerous assumptions, including, without limitation, 75% operations of each Cold Engine Power Plant, selling electricity at not less than an average of $0.07 a kilowatt – hour, securing contracts for the sale of electricity, obtaining appropriate approvals from AUC, and the terms and conditions related to the supply of electricity through the Power Pool, including, the applicable ISO rules, policies and procedures, as may be amended from time to time. See "Item 2.2 – Industry Regulation" and "Item 8 – Risk Factors"
Management expects Phase 2 to be substantially more capital intensive than Phase 1. To carry out Phase 2, the Company will require an engineering design team, technicians, a field representative and other personnel. Overall, the Company anticipates that it will need 10 additional personnel, in addition to the current management team. The Company will also need to rent spaces for a control and monitoring center, a design centre and for an assembly and fabrication facility. The Company intends to negotiate leases for each of these spaces for a three year term to give the Company the time it anticipates needing to carry out its objectives under Phase 2.
The design centre the company intends to lease will be used for design purposes (mainly associated with designing Cold Engine turbines). The fabrication facility it intends to lease will be used for fabrication and assembly purposes, as well as for shop testing. However, management may also use this facility as the first location where a Cold Engine Power Plant developed from a Production Prototype (if successfully developed) would be connected to the Grid and "field tested". Alternatively, a different site may be identified and secured (via lease) to where the Cold Engine Power Plant would be connected to the Grid. Regardless however, the Company's goal is to house one Cold Engine Power Plant at each site it secures. The Company has not allocated any cost for these sites as the presumption is that if the Cold Engine Power Plant to be connected to the Grid is successfully developed (and capable of producing sufficient amounts of electricity), the revenue generated from the sale of electricity to the Grid would offset the costs associated with leasing the site at which it is housed.
Any Cold Engine Power Plant that the Company does successfully construct and connect to the Grid will be monitored on-line from a control and monitoring centre that the Company intends to lease. By monitoring online, the Company should be able to increase or decrease power production according to any requests from AESO, and it will allow the Company to record electricity supplied to the Grid. It also improves the ability of the Company to detect issues with any Cold Engine Power Plants which may be brought online, and promptly respond by sending out repair teams.
Phase 2 will also require the Company to acquire machinery, equipment, computers and various other office supplies. Machinery and equipment costs are anticipated to be relatively nominal as the Company will continue to outsource to third parties the manufacturing of turbines based on the Company's plans and specification, and it intends to acquire the balance of the components of a Cold Engine Power Plant from third party suppliers. See Item 2.2 "Our Business – Phase 1 – The First Cold Engine Prototype". However, it will require some equipment for modification, testing and assembly purposes.
During Phase 2, the Company also intends to market the Cold Engine. Any Power Plants developed during this phase would be used to demonstrate and promote any advantages of the Cold Engine technology as a source of electricity. Initially, management intends to focus its marketing on industries that tend to use or produce large amounts of power, such as power producers, cities and municipalities, the mining industry and those with large ammonia refrigeration systems (i.e., meat packers).
Further, Cimco has expressed an interest in marketing the Cold Engine to the mining industry (worldwide) in conjunction with its refrigeration equipment and consulting services. This opportunity would be further explored by the Company in conjunction with its marketing efforts.
Management does not intend to sell Cold Engine's, however, it does intend to negotiate agreements respecting the leasing or licensing of Cold Engines, the monitoring and servicing of Cold Engines under lease or license, and service agreements related to installation and site preparation. The nature and the detail of any such agreements will depend on various factors, such as the viability of the Cold Engine technology (which will largely depend on the outcome of the Company's development and testing under Phase 1 and 2), the bargaining power of the respective parties and the market demand for electricity.
In carrying out Phase 2, Cimco has indicated that it will aid the Company with its shop testing efforts. (primarily with respect to partnering refrigeration systems to Cold Engines) and addressing technical hurdlers that arise during field testing (also primarily with respect to the refrigeration systems). In addition, Cimco has informally offered the Company use of certain of its facilities and technical resources.
The Project
This project will be undertaken in two phases.
- The first phase is the "Pilot Plant".
- The second phase is to build larger and larger cold engine power plants.
The Investment
You can contribute to the health and wellbeing of your Grandchildren and Great Grabdchildern.
- The first is a direct investment in the Private Offering Memorandum.
- The second is to participate via Crowd Funding.