ROYAL CARIDEA LLC. Overview

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2 Overview Problem - World-wide Shrimp Production Practices are Unsustainable because of Climate Restrictions, Ecological Limitations, Feed Concerns, Labor Abuse, Disease (EMS) and Health Concerns (Illegal Antibiotics) Solution: Super-Intensive Raceway Shrimp Farming Technology (SIRSFT) How is SIRSFT a Disruptive Technology SIRSFT application 2

3 The Problem

4 Global capture production of Litopenaeus vannamei Global aquaculture production of Litopenaeus vannamei Fisheries worldwide are in collapse

5 There is an obvious and growing need to farm shrimp in a responsible, sustainable, traceable, and low environmental impact manner which can enhance biosecurity (pathogen control), and help protect the environment, whilst producing shrimp in a cost efficient manner (Fisheries and Aquaculture Department of the Food and Agriculture Organization of the United Nations SIRSFT addresses all of these concerns in a positive and effective manner.

6 Unsustainability of Industrial Shrimp Farming - Alfredo Quarto In Asia, the average intensive farm has been found to survive for only 2-5 years before serious pollution and disease problems cause early pond closures. Overstocking and indiscriminate use of low quality feeds, antibiotics, and water additives are still widely practiced. Over half of the shrimp ponds in Thailand (where 85% of the production systems are intensive) have shutdown within the first decade of operation leaving behind a lasting negative ecologic impact.

7 Unsustainability of Industrial Shrimp Farming - Alfredo Quarto Disease outbreaks, environmental degradation, and management practices result in reduced production at all levels. Only 17% of nutrients in feed are converted into harvested shrimp in an intensive farm operation. Waste feed and fecal matter result in reduced oxygen and environmental pollution of nearby estuaries. Water recycled into ponds carries with it microbial pathogens. Major impact Reduced survival and limited growth.

8 Unsustainability of Industrial Shrimp Farming - Alfredo Quarto United States consumes over 556,000 tons per year, wild capture and farmed shrimp fill <6% of demand. Market demand is increasing in Europe and elsewhere. China in past year has become a net shrimp importer. Ecuador now exports majority of production to China. There is no more land to exploit.

9 The Solution: Super-Intensive Raceway Shrimp Farming Technology (SIRSFT) Sustainable Technology Driven Aquaculture

10 Intensive Pond Based Production <7 kg per m 2 per yr <1.5 g per week weight gain Survival <80% FCR >1.6 (dependent on natural feeding) Shrimp size at harvest (15-30 count/lb) Harvest 2-3 times per year Initial Capital Costs: lower Super-Intensive Stacked Raceway >100 kg m 2 per yr >1.5 g per week weight gain Survival >80% FCR <1.6 Shrimp size at harvest monthly/stack (16, 25.6 and 30-33g) Staggering time of stocking stacks allows harvesting daily Initial Capital Costs: higher

11 Aspects of sustainability Financial IRR (Internal Rate of Return) Financial PM Profit Margin Labor Cost (number of employees) Land productivity (kg/ha; $/ha) Water productivity (kg/m3) Nutrient conversion efficiency Extensive Low to High Low to High Very Low Low Low Low to High Semiintensive Low to Medium Low to Medium Low to Medium Low to Medium Medium Low-medium Intensive Low to Medium Low to Medium Medium to High Medium to High High Low to High Super-intensive (SIRSFT) Medium to High Medium to High Medium-Hgh to High Very High Very-high Medium to Very-high Energy efficiency Medium to Very High Low to Medium Low to High High to Very High Effluent quality Low to Very High Medium to High Medium to High High to Very High Risk of production failure Low to Very High Low to High Low to High Medium to High Long term sustainability of production Low to Very High Low to Very High Low to Very High High to Very High

12 Super-Intensive Raceway Shrimp Farming Technology (SIRSFT) What makes it a Disruptive Technology? How SIRSFT Works. SIRSFT Viable and Commercially Practical

13 The disruptive nature of SIRSFT is predicated on four technological advances: Demonstration that shrimp can be propagated at high densities in shallow water (water depths <30 cm). No environmental destruction (no use of ponds). No ground or water contamination. Understanding the nutritive optimum requirements of shrimp grown under high stress conditions. Formulation of a feed that optimizes growth under conditions of super-intensive cultivation. Demonstration that Shrimp can be effectively grown in warehouse facilities, permitting shrimp production at any location and at any time world-wide.

14 Additional disruptive features of SIRSFT: Shrimp survivability >85%. Biosecurity - System prevents introduction of pathogens and eliminates the need for chemicals and antibiotics. Shrimp production >1000mt/ha/yr vs <25mt/ha/yr in ponds Technology is tested and validated. SIRSFT MAKES SHRIMP PRODUCTION SUSTAINABLE, PROFITABLE, AND ECO-FRIENDLY.

15 Benefits Specific to Growing Shrimp in Stacked Raceways Stocking densities are at least two times higher than that for intensive ponds and >10 times that of semi-intensive ponds. Each vertical stack will have shrimp in various stages of grow out. Shrimp varying in size from 16-30g can be harvested and ready for market every day of the year. This is accomplished by employing a multi-phasic production and partial harvest model System uses minimal water and is ecologically and sustainably sound Shrimp survival is 10% greater than that obtained in intensive pond operations

16 Notable Raceway Features Shallow water depth of raceways. Water depth in raceway is only 8 inches (~20 cm) Potential for maximal water circulation in proximity to raceway wall because of center apex Large harvest pit. Facilitates shrimp transfer. Feeding and waste removal. Water Circulation All raceways are constructed using same design. Reduces cost. Water is recycled from each raceway back to central processing End and sides are easily accessed facilitating operations and maintenance Harvest Pit Center Apex 16

17 Raceway Stack Showing Perspective Raceway #4A

18 How SIRSFT Works Shrimp are grown in vertically stacked shallow water raceways. Post-larvae are stocked in nursery tank and after one month are transferred to Raceway #1. Thereafter, they are rotated at monthly intervals from #1 to #2A and #2B, then to #3A and #3B followed by #4A and #4B. Production pattern can be varied to meet market demand. Partial harvests at monthly intervals are executed at the end of 3 months, 4 months and at 4-5 months of the grow out periods allowing for harvest of 16-30g shrimp every month per stack. Note: Every time raceway #1 is vacated it is restocked to start cycle over. Thus, production is continuous in synchronous pattern

19 TABLE 1: SEVEN TIER SUPER-INTENSIVE PRODUCTION MODEL Unit Size Shrimp per Shrimp Shrimp Shrimp Weight of Biomass Harvested Biomass (Kg) Biomass (Kg) Production Raceway Square Shrimp per Shrimp per % Harvested Harvested Shrimp Harvested Kilograms Harvested Harvested per Phase Time Number Meters Square Meter Unit Survival Unit Square Meter grams per Square Meter per Unit Year (20 stacks) 2 2nd 4 weeks , rd 4 weeks 2A , rd 4 weeks 2B , Par Har 2A , Par Har 2B , th 4weeks 3A , th 4weeks 3B , Pa Har 3A , Par Har 3B , week completion 4A , week completion 4B , Total Harvest: kg /sq meter/stack/4 wk phase = Assumptions: 4wk/raceway phase, 2.4g/wk in linear growth phase to 25g, 2g/wk to 33g First 4 weeeks are carried out in PL tank. Pls ~0.7 g are then transferred to Raceway #1 The target biomass for production is 3 kg per square meter. Four weeks in phase 1, 4 weeks in phase 3, then a partial harvest and transfer to phase 4. After an additional 4 weeks a second partial harvest is performede and reamaining animals are moved to phase 5 to complete grow out cycle. Based on this production cycle, 13 crops can be produced per year Cycle can be varied to meet market demands. Total Production (kg/sq meter)/stack = Par Ha 2Ar+Par Har 2B +Par har 3A+Par 3B+4A+4B/4 wk cycle= kg/sq meter/cycle Grand total / stack / year = kg/sq meter/yr Grand total kg / stack / yr = kg/stack/yr Grand total kg / 20 stacks (plant) /yr = kg/plant (20 stacks) The above growth, survival, and production values are typical as represented by data for experiments by data for experiments conducted at the Texas Agrilife Research Maricukture Laboratory at Port Aransas.

20 TABLE 1: SEVEN TIER SUPER-INTENSIVE PRODUCTION MODEL Unit Size Shrimp per Shrimp Shrimp Shrimp Weight of Biomass Harvested Biomass (Kg) Biomass (Kg) Production Raceway Square Shrimp per Shrimp per % Harvested Harvested Shrimp Harvested Kilograms Harvested Harvested per Phase Time Number Meters Square Meter Unit Survival Unit Square Meter grams per Square Meter per Unit Year (20 stacks) 2 2nd 4 weeks , rd 4 weeks 2A , rd 4 weeks 2B , Par Har 2A , Par Har 2B , th 4weeks 3A , th 4weeks 3B , Pa Har 3A , Par Har 3B , week completion 4A , week completion 4B , Total Harvest: kg /sq meter/stack/4 wk phase = Assumptions: 4wk/raceway phase, 2.4g/wk in linear growth phase to 25g, 2g/wk to 33g First 4 weeeks are carried out in PL tank. Pls ~0.7 g are then transferred to Raceway #1 The target biomass for production is 3 kg per square meter. Four weeks in phase 1, 4 weeks in phase 3, then a partial harvest and transfer to phase 4. After an additional 4 weeks a second partial harvest is performede and reamaining animals are moved to phase 5 to complete grow out cycle. Based on this production cycle, 13 crops can be produced per year Cycle can be varied to meet market demands. Total Production (kg/sq meter)/stack = Par Ha 2Ar+Par Har 2B +Par har 3A+Par 3B+4A+4B/4 wk cycle= kg/sq meter/cycle Grand total / stack / year = kg/sq meter/yr Grand total kg / stack / yr = kg/stack/yr Grand total kg / 20 stacks (plant) /yr = kg/plant (20 stacks) The above growth, survival, and production values are typical as represented by data for experiments by data for experiments conducted at the Texas Agrilife Research Maricukture Laboratory at Port Aransas.

21 TABLE 1: SEVEN TIER SUPER-INTENSIVE PRODUCTION MODEL Unit Size Shrimp per Shrimp Shrimp Shrimp Weight of Biomass Harvested Biomass (Kg) Biomass (Kg) Production Raceway Square Shrimp per Shrimp per % Harvested Harvested Shrimp Harvested Kilograms Harvested Harvested per Phase Time Number Meters Square Meter Unit Survival Unit Square Meter grams per Square Meter per Unit Year (20 stacks) 2 2nd 4 weeks , rd 4 weeks 2A , rd 4 weeks 2B , Par Har 2A , Par Har 2B , th 4weeks 3A , th 4weeks 3B , Pa Har 3A , Par Har 3B , week completion 4A , week completion 4B , Total Harvest: kg /sq meter/stack/4 wk phase = Assumptions: 4wk/raceway phase, 2.4g/wk in linear growth phase to 25g, 2g/wk to 33g First 4 weeeks are carried out in PL tank. Pls ~0.7 g are then transferred to Raceway #1 The target biomass for production is 3 kg per square meter. Four weeks in phase 1, 4 weeks in phase 3, then a partial harvest and transfer to phase 4. After an additional 4 weeks a second partial harvest is performede and reamaining animals are moved to phase 5 to complete grow out cycle. Based on this production cycle, 13 crops can be produced per year Cycle can be varied to meet market demands. Total Production (kg/sq meter)/stack = Par Ha 2Ar+Par Har 2B +Par har 3A+Par 3B+4A+4B/4 wk cycle= kg/sq meter/cycle Grand total / stack / year = kg/sq meter/yr Grand total kg / stack / yr = kg/stack/yr Grand total kg / 20 stacks (plant) /yr = kg/plant (20 stacks) The above growth, survival, and production values are typical as represented by data for experiments by data for experiments conducted at the Texas Agrilife Research Maricukture Laboratory at Port Aransas.

22 TABLE 1: SEVEN TIER SUPER-INTENSIVE PRODUCTION MODEL Unit Size Shrimp per Shrimp Shrimp Shrimp Weight of Biomass Harvested Biomass (Kg) Biomass (Kg) Production Raceway Square Shrimp per Shrimp per % Harvested Harvested Shrimp Harvested Kilograms Harvested Harvested per Phase Time Number Meters Square Meter Unit Survival Unit Square Meter grams per Square Meter per Unit Year (20 stacks) 2 2nd 4 weeks , rd 4 weeks 2A , rd 4 weeks 2B , Par Har 2A , Par Har 2B , th 4weeks 3A , th 4weeks 3B , Pa Har 3A , Par Har 3B , week completion 4A , week completion 4B , Total Harvest: kg /sq meter/stack/4 wk phase = Assumptions: 4wk/raceway phase, 2.4g/wk in linear growth phase to 25g, 2g/wk to 33g First 4 weeeks are carried out in PL tank. Pls ~0.7 g are then transferred to Raceway #1 The target biomass for production is 3 kg per square meter. Four weeks in phase 1, 4 weeks in phase 3, then a partial harvest and transfer to phase 4. After an additional 4 weeks a second partial harvest is performede and reamaining animals are moved to phase 5 to complete grow out cycle. Based on this production cycle, 13 crops can be produced per year Cycle can be varied to meet market demands. Total Production (kg/sq meter)/stack = Par Ha 2Ar+Par Har 2B +Par har 3A+Par 3B+4A+4B/4 wk cycle= kg/sq meter/cycle Grand total / stack / year = kg/sq meter/yr Grand total kg / stack / yr = kg/stack/yr Grand total kg / 20 stacks (plant) /yr = kg/plant (20 stacks) The above growth, survival, and production values are typical as represented by data for experiments by data for experiments conducted at the Texas Agrilife Research Maricukture Laboratory at Port Aransas.

23 Design Considerations Driving Modular Construction From Pre-Fabricated Components Water depth in raceway is only 8 (20 cm) inches, its weight is lb./ft 2. Total water weight to be supported >485,000 lb. Problems with open stack system: Evaporation and energy loss. Open environment invites huge heat loss and water evaporation. Optimum shrimp growth when water is maintained at 88 F. Cost of structural steel for support, floor integrity, etc. Cost of onsite assembly.

24 Design Considerations Driving Modular Construction From Pre-Fabricated Components Standardization of all components, raceways, nursery, RAS, and feed distribution, etc. Solution: Intermodal shipping containers Reduced cost Structural rigidity and self-supporting when stacked Self-contained, contents can be completely enclosed for shipment Transport by common carrier Readily available

25 What are Intermodal Shipping Conex Containers? Freight containers or sea cans which are standardized and made of reusable steel for the safe, efficient and secure storage and movement of materials and products within a global containerized intermodal freight transport system.

26 What are Intermodal Shipping Conex Containers? Intermodal indicates that the container can be moved from one mode of transport to another (from ship, to rail, to truck) without unloading and reloading the contents of the container.

27 Stacked Raceway Design To Facilitate Modular Construction From Pre-Fabricated Components Raceways are constructed inside each container. After raceway installation containers are configured vertically as seen in figure. Each raceway is physically separated from the one above and below. Gravity is used to move the shrimp. A flex tube is used to connect raceways. A gate valve is opened on the upper raceway and shrimp descend in the water with little or no mortality. Recirculated water, aeration, hydronic heating, feeding and monitoring systems, etc., are ported through the walls of each container.

28 Stacked Raceway Design To Facilitate Modular Construction From Pre-Fabricated Components Each raceway is formed by sealing together four sets of double stacked containers along the linear axis to create a seven tier raceway stack. Feed, water for recirculation, aeration, etc. are ported through the sides of the containers. Monitoring of shrimp, feed, etc. is facilitated by television cameras mounted inside each container and by side access doors.

29 Stacked Raceway Design To Facilitate Modular Construction From Pre-Fabricated Components Access panels for cleaning and monitoring raceway conditions Side View of Two 53 Stacked Containers

30 How SIRSFT Works: Interlinked Perspective

31 Integrated SIRSFT: 1 Million Pounds/Year

32 Patents Issued and Pending USA patent # 8,336,498 System and Method For Super-Intensive Shrimp Production issued December 25, System and Method For Super-Intensive Shrimp Production issued in EU and China November 2013 Construction of Multi-Phasic Integrated Super- Intensive Shrimp Production System (Filed February 19, 2014) 32

33 Rationale for Success of SIRSFT Feed has been formulated and repeatedly tested to maximize growth and minimize animal stress in a high stocking density environment. High quality feed is provided 24/7. Minimal wastage and no diurnal variation. Shrimp are maintained under low light conditions at ideal temperature conditions. Reduced production and capital costs. Sustainable with significantly reduced environmental issues. 33

34 Rationale for Success of SIRSFT Feed conversion ratios (FCRs) of 1.6 or better are maintained with a production of >100 kg of shrimp per year per m 2 of floor space occupied by a stack. Intensive production at the very most in southeast Asia, yields 70,000 kg/ha/year or about 7 kg/m 2 /yr with harvests occurring at intervals of 3-4 months. In comparison 20 raceway stacks occupying a floor footprint equal to 3,200 m 2 will yield ~500,000 kg/ha/year. Shrimp available year round. 34

35 Rationale for Success of SIRSFT Reduced production and marketing costs: Higher-quality feed specification, lower FCR Year round feed requirements; reduced feed costs due to predictable feed mill costs Reduced post-larvae costs quantity and prescheduled (non-seasonal breeding operation) No climatic restrictions on plant locations Proximity to market Physical facilities and infrastructure used year round No barriers to marketability of product 35

36 ROYAL CARIDEA LLC Rationale for Success of SIRSFT Five consecutive successful trials at the world s largest shrimp mariculture facility located in Port Aransas, TX. Stocking density, growth parameters, culture, conditions and feed formulations were tested and retested to verify the economics of the system. Economic models have been developed. Comparative analyses show non-stack systems are no match for SIRSFT. Data from comparative analyses used to generate the Proforma economics. 36

37 True value of technology as stated by shrimp producer in Thailand Durwood M. Dugger When you combine theft losses, diseases that might be averted with a closed (and biosecure) environment and the multi-crop advantage of temperature controlled, year-round production without seasonal growth slumps due to low temps (common even in the tropics with equatorial dry seasons), the additional capital for recirculation aquaculture systems (RAS) seems economically justified in the long term.

38 Principles Behind the Technology

39 Dr. Addison Lee Lawrence Early pioneer in how to breed and propagate shrimp in captivity Developed feed formulation that promotes growth and production in a super-intensive raceway system. Invented the technology that allows propagation of shrimp in shallow stacked raceways (break through technology). Conducted multiple consecutive trials at the world s largest shrimp nutrition mariculture facility to verify growth parameters, culture conditions, feed formulations, and most importantly economic feasibility of shrimp production in stacked raceways.

40 Dr. Addison Lawrence World authority on shrimp nutrition and aquaculture. Consults for companies worldwide. Senior Faculty Fellow, Regents Fellow and Project Leader at Texas A&M University. Mentored over 90 graduate students and carried out >$17 MM of research. Developed and runs the largest shrimp nutrition mariculture facility in the world, located in Port Aransas, TX.

41 Dr. Maurice C. Kemp Ph.D. in Medical Microbiology with specialization in Virology. Scientist at CDC. Academic and Pharmaceutical Research appointments. Served as Associate Professor of Veterinary Microbiology at Texas A&M University. Worldwide business experience. CTO and co-founder of Mionix Corporation, a developer and distributor of antimicrobial food and feed products to the agriculture and aquaculture industries.

42 Dr. Maurice C. Kemp Developer of Vitoxal a shrimp feed additive that controls pathogens in shrimp without the need for antibiotics. Inventor on multiple patents issued worldwide. Inventor on patent application Filed February 19, 2014, entitled Construction of Multi-Phasic Integrated Super- Intensive Shrimp Production System.