BOC.TSX.V Investor Presentation Updated August 5, 2014

BOC.TSX.V Investor Presentation
Updated August 5, 2014
BlueOcean NutraSciences (“BlueOcean”) is
listed on the TSX Venture Exchange (TSXV:BOC)
This presentation contains certain forward-looking statements. Forward-looking statements are
statements that are not historical facts, and include but are not limited to, estimates and their
underlying assumptions, statements regarding plans, objectives and expectations with respect to the
effectiveness of BlueOcean’s business model, future operations, products and services; the impact
of regulatory initiatives on BlueOcean’s operations, the size of and opportunities related to the
markets for their products; general industry and macroeconomic growth rates, expectations related
to possible joint and/or strategic ventures and statements regarding future performance.
The forward-looking statements contained in this presentation are made as of the date hereof.
Unless required by law, BlueOcean’s does not undertake any obligation to update publically or to
revise any of the included forward-looking statements, whether as a result of new information,
future events or otherwise The Common Shares of the Corporation have not been and will not be
registered under the United States Securities Act of 1933, as amended and may not be offered or
sold in the United States absent registration or an applicable exemption from the registration
requirement. This presentation shall not constitute an offer to sell or the solicitation of an offer to
buy, nor shall there be any sale of any securities of the Corporation in any
jurisdiction in which such offer, solicitation or sale would be unlawful.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the
content of this presentation.
Specialty Oils
BlueOcean NutraSciences Inc. (BlueOcean), formerly Solutions4CO2 Inc. (TSXV:SFC), is a
Canadian company that develops specialty oils targeted at the rapidly growing health and
wellness, and animal feed markets.
AstaShrimp
(Superior Profile to Krill Oil)
AlgaOmega
(Omega-3 Algae Oil)
AstaTene
(Natural Antioxidant Oil)
BlueOcean’s goal using its three proprietary production platforms is to be the lowest cost
global supplier of these specialty oils.
Organization Chart
BlueOcean
NutraSciences Inc.
BlueOcean
Shrimp Products
Inc.
Asta
NutraSciences
Inc.
S4CO2 (USA) Inc.
(Future Algae)
S4CO2
Technology Inc.
50% interest in
70717 NL Ltd.
50% interest with
Sven Larsen
Future Algae JV
US Provisional
Patents filed
US Provisional
Patents filed
US Provisional
Patents filed
Exclusive global,
non-royalty gas
infusion license
from Canzone
AstaShrimpTM
AstaTeneTM
AlgaOmegaTM
Company Share Statistics
TSX Venture Symbol
BOC
(Formerly SFC)
Date of Listing
March 30, 2012
52 Week Price Range
$0.12 - $0.40
Common Shares
50,668,651
Escrow Shares
4,025,138
Market Float
46,643,513
Broker Warrants
10,936,618
Options
5,256,090
Fully Diluted Shares
66,861,359
As of August 5, 2014
As of August 5, 2014; Source: SEC Filings
COMPANY
Industry
Comparable Companies
SOLAZYME
Microalgae
ENZYMOTEC
Krill Oil
NEPTUNE
TECHNOLOGIES
CYANOTECH
BLUEOCEAN
Krill Oil
Microalgae
Shrimp Oil
Organic Fertilizer
Algae Oil
Astaxanthin
Omega-3
Astaxanthin
Spirulina
Astaxanthin
Omega-3
Market Focus
Fuels
Omega-3
Chemicals
Health Sciences
Health Sciences
Ticker Symbol
NASDAQ:SZYM
NASDAQ:ENZY
NASDAQ:NEPT
TSX:NTB
NASDAQ:CYAN
TSXV:BOC
Current Stock Price
US$9.12
US$9.11
US$1.93
US$4.60
C$0.22
52 Week Price
Range
$8.00 - $15.00
$9.11-$35.12
$1.93 - $4.21
$4.41 - $6.81
$0.12 - $0.40
Current Market Cap
$692,894,736
$196,455,510
$142,419,266
$25,244,975
$11,147,103
LQA Sales
$63,756,000
$35,828,000
$14,764,000
$28,905,000
EV/Sales
10.5X
5.5X
9.5X
1X
LQA EBITDA
-$128,928,000
$20,364,000
-$23,088,000
$165,000
EV/EBITDA
N/A
9.5X
N/A
153X
2013 Global Health and Wellness Markets
 Omega-3 and Astaxanthin health and wellness markets are high growth
 Global Omega-3 retail market is estimated at $25B, by 2016 - $34B
 Global Krill Oil ingredient market is estimated at $150M, with 30% CAGR
 Krill Oil ingredient is currently priced at $150-$200/kg wholesale
 Global Algae Omega-3 Oil ingredient market is estimated at nearly $500M, with 14% CAGR
 Algae Oil ingredient is currently priced at $100 - $150/kg wholesale
 Global Natural Astaxanthin ingredient market estimated at $200M, by 2017 - $700M
 Global Feed Astaxanthin market estimated at $200M, current unmet demand of up to $1B
 Natural Astaxanthin ingredient is currently priced at $10,000 - $15,000/kg wholesale
 High costs of scalability limits companies from economically entering these markets
 BlueOcean’s low capex/opex platforms will enable omega-3 and astaxanthin oil production
at scale and high margins
Source: Packaged Facts; Frost & Sullivan; Neptune Technologies; Asti-Pharma; Algae Biosciences; Valensa; BCC Research; Fuji Healthsciences
Global Omega-3 Market




Global Omega-3 retail market is estimated at $25B, expected to grow to $34B by 2016
Global Algae Omega-3 Oil ingredient market is estimated at nearly $500M, with 14% CAGR
Double digit demand growth for omega-3 oils is exceeding new supply
Over 80% of the global omega-3 supply is marine based and capped by quotas (i.e. MSC)
Source: Frost & Sullivan; GOED; DSM
Global Astaxanthin (AX) Health and Wellness Market
 Global Natural Astaxanthin ingredient market is estimated at $200M, expected to grow to
$700M by 2017
 Natural Astaxanthin is targeted at the human eye, joints, muscle, brain, heart and fish feed
markets
 BlueOcean’s Natural Astaxanthin also contains Beta-Carotene, Zeaxanthin, and Canthaxanthin
 Astaxanthin is the most powerful antioxidant that is 6,000 times stronger than vitamin C
Source: Frost & Sullivan; Fuji Healthsciences
Global Astaxanthin Fish Feed Market




Global Astaxanthin Feed market is estimated at $200M, current unmet demand of up to $1B
Majority of the feed market is supplied by lower value Synthetic Astaxanthin priced at $1500/kg
Although the Health and Wellness AX market is rapidly growing, the Feed market is larger
Feed demand is moving from synthetic to natural, however natural supply is limited
Source: Frost & Sullivan; BCC Research
BlueOcean’s Customer Prospects
BlueOcean’s AstaShrimp Oil
BlueOcean has developed an Aqueous Extraction Process (AEP) to extract high astaxanthin,
phospholipid, omega-3 oil from shrimp by-products (mince and shell that are 30-50% of the
landed shrimp). AstaShrimp has a superior astaxanthin and phospholipid profile to krill oil.
BlueOcean has formed a 50/50 Joint Venture with Quinlan Brothers Ltd. of Newfoundland to
process all of Quinlan’s shrimp by-products (See Appendix A for JV announcement).
• BlueOcean has developed a licensed Aqueous Extraction
Process (AEP) that is Generally Regarded As Safe (GRAS)
BlueOcean’s
Aqueous Extraction
Process
(AEP)
• This AEP process extracts and preserves the astaxanthin,
phospholipids and omega-3s in both the mince and shell oil
• The extracted shrimp oil can be blended with other oils such
as Alaskan salmon oil to allow the oil to be encapsulatable
• The BlueOcean/Quinlan JV is modeled on a variable cost
structure using toll processors for the AEP extraction
• Both the Quinlan mince and shell waste is shipped frozen to
the toll processor
• Quinlan’s shrimp feedstock is Marine Stewardship Council
certified
BlueOcean’s AstaShrimp Oil Value Comparison
BlueOcean’s AstaShrimp oil has a superior astaxanthin and phospholipid profile to krill oil.
The high levels of Natural Astaxanthin in AstaShrimp makes it a two-in-one product for
both the recommended daily Astaxanthin supplement as well as Omega-3s, both of which
are in a bio-available Phospholipid form.
Profile
AstaShrimp
Neptune NKO
Superba
Total Omega-3 (g/100g)
23
27
25
EPA (g/100g)
12
14
12
DHA (g/100g)
9
9
7
Phospholipids (g/100g)
50
47
45
Astaxanthin (ppm)
8,000
1,500
110
Astaxanthin Value @ $10,000/kg
$80
$15
$1.10
Krill oil value less Astaxanthin
$135
$135
$135
Est. Oil value including AX
$215
$150
$136.10
Assume Krill Oil ingredient price $150/kg; Assume Natural Astaxanthin price $10,000/kg;
Actual Neptune NKO and Superba pricing not reflected and may differ from Oil value incl. AX figure
Source: Neptune Biotech; Aker Biomarine;
AstaShrimp Oil Production Assumptions
(Quinlan only – 23% of global shrimp bi-product capacity)
Total Quinlan Feedstock Capacity
46,200 to 77,000 kg of AstaShrimp per year
($ dollars per year)
At 30% waste
At 50% waste
JV Revenue (Shrimp Oil)
7,590,000
12,980,000
COGS
4,620,000
7,700,000
Gross Margin
2,970,000
5,280,000
120,000
120,000
EBITDA
2,850,000
5,160,000
BlueOcean EBITDA (50%)
1,425,000
2,580,000
EBITDA/FD Share
0.021
0.039
BlueOcean Shrimp
Valuation
(20X)
$0.42
(16X)
$0.62
SG&A
Shrimp Oil sales only
67M FD Shares as of August 5, 2014
Source: Quinlan Group Companies
BlueOcean’s Organic Shrimp Fertilizer Assumptions
• Cold Enzymatic Hydrolysate Process
Technology
Production Capacity
• Maintains important L-Amino Acids versus destroying them
• NPK values are customizable to target specific crop markets
• Liquid Concentrate that can be certified Organic
• Feedstock can be either the wet shrimp waste or the post-oil
extraction residual biomass
• From Quinlan feedstock: est. 900,000 gallons per year
• Build own plant either at the shrimp processing plants if using
wet shrimp waste or at the Toll Processor if using residual
biomass
• Option to toll process at the Toll Processor as equipment is all off
the shelf
Sales
• Existing Distributors
• Distributor pricing for similar fish based fertilizer: $10/gallon
• Net margins to JV: est. $7/gallon
Organic Shrimp Fertilizer Production Scenarios
(Quinlan Only – 23% of global shrimp bi-product capacity)
Total Quinlan Feedstock Capacity
910,005 to 1,516,600 gallons of liquid Shrimp Fertilizer per year
($ dollars per year)
At 30% waste
At 50% waste
JV Revenue (Shrimp Fertilizer)
9,100,000
15,166,000
COGS
2,730,000
4,550,000
Gross Margin
6,370,000
10,616,000
100,000
100,000
EBITDA
6,270,000
10,516,000
BlueOcean EBITDA (50%)
3,135,000
5,258,000
EBITDA/FD Share
0.047
0.078
BlueOcean Shrimp Valuation
(20X)
$0.94
(16X)
$1.25
SG&A
Shrimp Fertilizer sales only
67M FD Shares as of August 5, 2014
BlueOcean’s AlgaOmega Oil
BlueOcean has developed a proprietary algae oil production platform that produces a high
omega-3 EPA and DHA algae oil that is targeted at the adult and vegan markets and is nonGMO.
BlueOcean has completed the algae production process development at St. Cloud State
University and will now demonstrate and validate the production process at the Arizona
Centre for Algae Technology and Innovation (AZCATI).
BlueOcean’s AlgaOmega Strategy
• AZCATI demonstration and validation project
AZCATI
• AlgaOmega oil samples for customer evaluation
• See Appendix B for AZCATI project announcement
Commercial Strategy
• BlueOcean’s commercialization strategy is to form a
partnership with a major strategic company in the
omega-3 oil industry
AlgaOmega Oil Production Scenarios
Joint Venture Model (50/50)
Estimated AlgaOmega price $100/kg
($ dollars per year)
Bronze: 20 MT
Silver: 50 MT
Gold: 100 MT
JV Revenue (Algal Oil)
2,000,000
5,000,000
10,000,000
COGS
1,000,000
2,000,000
3,500,000
Gross Margin
1,000,000
3,000,000
6,500,000
SG&A
150,000
300,000
500,000
EBITDA
850,000
2,700,000
6,000,000
BlueOcean EBITDA (50%)
425,000
1,350,000
3,000,000
EBITDA/FD Share
0.006
0.02
0.045
BlueOcean Shrimp
Valuation
(20X)
$0.12
(16X)
$0.32
(12X)
$0.54
Algal Oil sales only
67M FD Shares as of August 5, 2014
BlueOcean’s AstaTene
BlueOcean has formed a 50/50 Joint Venture to develop a proprietary Natural Astaxanthin
production platform that will produce AstaTene, a carotenoid mix high in Natural
Astaxanthin.
BlueOcean is completing the platform bench scale validation and, if successful, will
complete a pilot commercial demonstration, with full commercial production by 2014 year
end or early 2015.
BlueOcean’s AstaTene Strategy
Commercial
Demonstration
Commercial
Production Estimates
• Guelph Food Technology Institute scale-up next
• Commercial demonstration and sample production
• Commercial Production Capacity starting at 400 kg
AstaTene per year; up to 4,000 kg per year fully scaled
• Toll Processing option
AstaTene Production Scenarios
(Nutraceutical Market)
Joint Venture Model (50/50)
Est. Natural AstaTene price $10,000/kg
($ dollars per year)
Bronze: 400 kg
Silver: 1,000 kg
Gold: 4,000 kg
4,000,000
10,000,000
40,000,000
800,000
2,000,000
8,000,000
3,200,000
8,000,000
32,000,000
200,000
500,000
1,000,000
EBITDA
3,000,000
7,500,000
31,000,000
BlueOcean EBITDA (50%)
1,500,000
3,750,000
15,500,000
EBITDA/FD Share
0.022
0.056
0.231
BlueOcean Shrimp
Valuation
(20X)
$0.44
(16X)
$0.90
(12X)
$2.77
JV Revenue (AX)
COGS
Gross Margin
SG&A
Estimated AstaTene sales only
67M FD Shares as of August 5, 2014
AstaTene Production Scenarios
(Fish Feed Market)
Joint Venture Model (50/50)
Est. AstaTene price $3,000/kg
($ dollars per year)
Bronze: 800 kg
Silver: 2,000 kg
Gold: 8,000 kg
2,400,000
6,000,000
24,000,000
800,000
2,000,000
8,000,000
1,600,000
4,000,000
16,000,000
200,000
500,000
1,000,000
1,400,000
3,500,000
15,000,000
700,000
1,750,000
7,500,000
EBITDA/FD Share
0.01
0.026
0.112
BlueOcean Shrimp
Valuation
(20X)
$0.20
(16X)
$0.42
(12X)
$1.34
JV Revenue (AX)
COGS
Gross Margin
SG&A
EBITDA
BlueOcean EBITDA (50%)
Estimated AstaTene sales only
*Fish Feed AstaTene will be diluted 50% therefore doubling capacity and reducing unit costs
67M FD Shares as of August 5, 2014
BlueOcean’s Management Bios
Gavin Bogle, JD, MBA, MS – Chief Executive Officer
Mr. Bogle has been an intellectual property, regulatory, and licensing attorney for over 20
years in mostly the North American biotechnology, pharmaceutical and supplement
industries. He has extensive cross-border transactional experience including intellectual
property aspects of corporate transactions such as licensing, contracts and collaborations,
acquisitions, financings, divestitures and managing intellectual property holdings.
Randy Uens – VP, Global Marketing and Sales
Mr. Uens is a serial entrepreneur that has successfully developed and executed several
business platforms including the Rhinobag concept which was sold to Waste Management
Inc., a Fortune 200 company in 2009. Mr. Uens joined Waste Management Inc. overseeing the
consolidation, integration and rebranding of the Rhinobag product to Bagster.
Dil Vashi, MBA – Corporate Development
Before joining BlueOcean, Mr. Vashi worked for a small private equity firm where he identified,
analyzed, evaluated and recommended prospective investments, served the corporate
development needs of SME client companies, and participated in the capital raise efforts for
client companies.
BlueOcean’s Share Ownership
BlueOcean is a publically traded company listed as BOC on the TSX Venture Index.
At present, BlueOcean estimates that the following shareholders are known to have
holdings greater than 10% of its outstanding shares: Samuel Kanes (10.8%)
Direct investor groups include:

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



AltaCorp Capital
Roadmap Capital
Macquarie Private Wealth
Sustainable Chemistry Alliance
Pathfinder Asset Management Limited
Carrus Capital
Leon Frazer & Associates
Other institutional investors
Management also has share and option ownership as per their compensation package.
Thank You
For more information please contact us:
[email protected]
Tel: 416-970-3266
www.blueoceannutra.ca
Solutions4CO2 Inc. Announces Joint Venture With
Quinlan Brothers Ltd.
TORONTO, ONTARIO–(Marketwired – June 6, 2013) - Solutions4CO 2 Inc. (“S4CO2” or the “Company”) (TSX
VENTURE:SFC) is pleased to announce that it has finalized a joint venture (the “JV”) with Quinlan Brothers Ltd.
(“Quinlan”) previously announced by the parties under a Letter of Intent dated March 22, 2013. The JV will produce
high value Omega 3/Astaxanthin enriched oils (the “Products”) from cold water shrimp waste streams using S4CO2′s
Bio-Extraction Process TM (the “Process”). Quinlan Brothers Ltd is a Canadian processor of cold water shrimp and
snow crab from its processing facility located at Bay de Verde, Newfoundland and Labrador.
Under the terms of the JV, the parties agree:
1)
That Quinlan will provide the JV with exclusive rights to the Quinlan Feedstock under a Supply Agreement and
the JV will seek to secure additional feedstock supply from global sources beginning Q3 2013.
2)
S4CO2 will grant all rights and usage of its Bio-Extraction Process™, and all improvements thereto, to the JV for
the purpose of conducting the Business, on an exclusive, no-fee basis covering North America.
3)
That the JV will outsource the majority of the processing of the Quinlan Feedstock to toll processors until
December 1, 2013.
4)
The JV will negotiate global off-take contracts for the sale of the 2013 Products.
5)
The JV will negotiate the toll-processing contract(s) for the 2013 production of the Products with such contracts
including quality assurance, packaging and labelling based on the off-take agreements.
6)
Quinlan and S4CO2 will refer all opportunities that come to its attention where the Bio-Extraction Process™ or
the Quinlan Feedstock could be a viable solution exclusively to the JV.
Appendix A
BlueOcean NutraSciences Inc. to Demo AlgaOmega Algae
Production System at Arizona Center for Algae Technology
and Innovation ("AzCATI")
TORONTO, ONTARIO--(Marketwired - July 2, 2014) - BlueOcean NutraSciences Inc. ("BlueOcean") (TSX
VENTURE:BOC) will demonstrate its algae production system at the Arizona Center for Algae Technology and
Innovation ("AzCATI") located at Arizona State University ("ASU"). AzCATI is part of the ASU led AlgaeTestbed PublicPrivate Partnership (ATP3) and is recognized as the preeminent test facility for algae development and validation.
The demonstration will provide third party validation on all production metrics. The demonstration is expected to be
completed within the next 90 days.
AlgaOmega™ algae oil contains over 50% more EPA than competitor algae oils as well as a significant amount of
DHA. This combination of high EPA and DHA uniquely positions AlgaOmega™ in the market place.
AlgaOmega™ is phototrophically produced utilizing a proprietary bio-reactor design that incorporates a patented
hollow fiber CO2 infusion technology and light delivery system resulting in up to three (3) times more algae biomass
production than competitor production systems.
"BlueOcean is pleased to be working with AzCATI to demo our algae production system. Having third party validation
of our commercial production system by AzCATI will allow BlueOcean to complete our discussions with major
strategics on contingent offtake agreements." - said BlueOcean's CEO, Douglas Kemp-Welch.
"Third party validation of commercially relevant technology is one of the key missions for AzCATI and our ATP3
program. Technology companies, like BlueOcean NutraSciences, having easy access to facilities and expertise such as
those available within our ATP3 network can help accelerate innovation and commercialization of algal technologies
and products." - said Dr. John McGowen, Portfolio Manager in ASU's Office of Knowledge Enterprise Development's
Project Management Office and Director of Operations and Program Management for AzCATI and ATP3.
Appendix B
BlueOcean’s Partners
AstaShrimp Partners
Marks and Spencer
Certified Supplier
Northern Coldwater Shrimp
is MSC Certified
BRC Global Standard for Food Safety:
Grade A Supplier
AlgaOmega Partners
AstaTene Partners
Appendix C

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