Earthpac Limited

By Paul Dodd

PledgeMe.Investment

Technology,



NZ $482,647 pledged


166 people pledged


Closed


NZ $850,000 minimum target


Min

NZ$850,000

Max

NZ$2,000,000

56 56% Complete

This campaign failed to reach its target by 30/05/2022 at 12:00 PM (NZST) and is now closed.

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About

Earthpac Limited

An Elegant New Zealand Solution To The Plastic Problem

At Earthpac, we know that we can’t start to solve our global waste problem without everyone’s help. That’s why we’ve spent more than 20 years developing 100% home-compostable, food-safe packaging made from all-natural potato starch, recycled from the production processes of some of our favorite potato products.

Earthpac’s products are durable, versatile, food-safe and 100% home-compostable.
You can even eat them (if you wanted to)!

We’re already working in hospitals by offsetting hundreds of tonnes of waste from plastic medical trays. With the recent development of a fit-for-purpose, laminated, compostable film, we’re now able to make durable, waterproof and temperature-resistant food packaging for meat and fresh produce suppliers whose earth-conscious customers want much better solutions than polystyrene and plastic.

It’s a perfect circle of offsetting food waste to reduce plastic production to package and preserve food.

What we need now is to get these great products to more people by increasing our production capacity. The success of this $2m crowdfunding campaign will help us with our forecast commercial production line and enable us to help divert 10 million plastic trays from New Zealand’s landfills every year.

The Plastic Problem

For too long, plastic has been the default choice for packaging. It’s durable, it’s cheap to produce, it’s hugely versatile and it preserves our products for much longer.

Unfortunately, plastic also takes hundreds of years to decompose in landfill, it’s killing our wildlife, most of it is single-use and millions of tonnes of it have made their way into our oceans. Recycling has helped curb the environmental devastation but, when 39% of recyclable products end up in landfill, this just isn’t enough.

In recent years, we’ve seen a range of better options for compostable packaging, and thousands of conscious consumers have already made this a purchasing priority. But not all compostable products are created equal.1

The plastic problem

1 www.wasteminz.org.nz | 2 + 3 ourworldindata.org | 4 www.wasteminz.org.nz | 5 theregister.co.nz | 6 colliercountyfl.gov

The End of the Linear Economy

We see the linear economy as a waste-producing machine that accelerates carbon emissions and resource depletion by driving us to endlessly extract and manufacture new resources, products and stuff, rather than conserving and reusing what we already have. We believe in the need to transition to an economy where waste, pollution and greenhouse gases are designed out, materials are kept in circulation and natural systems are regenerated.

Recycling is the option we use when we’ve failed to prevent and reduce waste or reuse resources. If these are recycled at all, it’s more accurate to say they are ‘downcycled’ (made into different products that aren’t, themselves, recycled) - not exactly a closed-loop system.* Even when it works, recycling practices still pollute, create waste and use massive amounts of energy. This is why waste-offsetting and home-composting are going to be critical to creating circular economies, and reducing the devastating environmental impacts of the products we consume.

Life Cycle

Our business starts from the ground up, literally. We don’t just create products that are more environmentally friendly after use; we are committed to making every step of the product lifecycle pro-environment. We fully embrace the earth-to-earth model and are continually working to refine our processes, improve our products and minimise our footprint.

Life cycle of Earthpac trays

The Opportunity

Earthpac presents an opportunity to invest in the local production of home-compostable packaging products using 100% New Zealand raw materials. Our existing production is by way of compression moulding of trays for hospitals; with the recent development of a home-compostable laminated film, we have the opportunity now, with your support, to create waterproof trays using a cutting-edge injection moulding process.

Our pilot plant has demonstrated technical and commercial feasibility of the proposed production of these new, laminated trays. We have a very clear product development focus initially on meat and produce trays, as this market requires high volumes of similar products. They are highly responsive to the clear customer preference for sustainable packaging and are early adopters of alternative and innovative products in the space.

We already operate a small production plant in a strategically located facility in Auckland which offers sufficient scope for production expansion, warehousing, logistics and office space. With your investment, we wish to increase our capacity and capability through commercial production in New Zealand and via a franchise model for offshore opportunities.

  • 100% home compostable – can be composted in your own back garden and will completely break down within 5-8 weeks
  • Our packaging is made from 100% locally grown potatoes – the result is toxin-free, with no harmful by-products
  • Outstanding durability and insulation – can be frozen, microwaved and hold both hot and cold liquids, raw meats and vegetables
  • The starch is extracted from a food processing waste stream, resulting in a manufacturing process which is carbon negative

The Global Problem is Our Opportunity

In 2018, Australia established the ambitious 2025 National Packaging Targets.

100% of packaging must be reusable, recyclable or compostable by 2025, with 70% of plastic packaging being recycled or composted.*

39% of New Zealand’s recyclable household plastic bottles and containers go to landfills.

Simply replacing polystyrene products with recyclable plastic products, while better, is not the solution.*

Emerging economies are no longer willing to accept the world’s waste.

At a meeting in Basel in May 2019, 187 countries agreed to dramatically restrict international trade in scrap plastics to prevent plastics dumping.*

The Team

Richard Williams
Founder and Director

Richard is the Founder of Earthpac. His passion to see a significant reduction in waste in landfills drove him to spend the last 15 years developing the compostable, environmentally friendly, food-safe packaging that has now become known as Earthpac. Richard comes from an aircraft engineering background. In 2007, he was invited to join the ranks of 101 Incredible Kiwis as an eco-entrepreneur.

Paul Dodd
Director

Paul was appointed to the Board as Chairperson in 2012. Paul’s management and financial expertise have been harnessed to bring Earthpac to full commercial realisation. Paul is a Director of Paul Dodd and Associates Limited, a successful accounting practice specialising in compliance and consulting to a diverse range of national and international clients.

Steve Habershon
Consultant

Steve is a manufacturing consultant with over 40 years’ experience in manufacturing as a business owner and an employee of a large multinational company. His background includes tool-making and general and technical management. Steve now heads up his own consultancy business, Trakax International Limited.

 

Our Journey

Like our products, our journey has been organic in its development as we have experimented, learned and reapplied ourselves to the task ahead. After spending over $3m in R&D, we and our technology have reached a major milestone. With a functioning small-scale production line delivering outstanding products, we now enter the commercialising phase.

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The Forecast Road Ahead

Why Now?

Historically, Earthpac’s compression-moulded products have been used in the medical field, in particular through compostable drug trays at hospitals in Auckland and Timaru. Auckland DHB, alone, uses 175k single-use plastic trays every year. With Earthpac’s products, last year we helped them divert more than 11 tonnes of plastic from landfill, with more than 3 tonnes of Earthpac trays converted into compost. This is based on the number of our trays sold to the ADHB and the known weight of the plastic trays previously used.

Over the last 3 years, we’ve been working with Convex Plastics in Hamilton on the development of a laminated, compostable film and new in-house processing technology to incorporate it in the next generation of Earthpac products. This enables us now to create highly functional moisture- and heat-resistant food packaging that can still biodegrade in your home compost in 5-8 weeks. Simply put, the addition of this certified compostable film is a game-changer for us.

We are now able to produce small batches of injection-moulded, laminated trays from our proprietary processing plant that are waterproof, durable and suitable for the food packaging market. Our target market is primary producers such as organic or niche meat producers in both export and local markets. The success of this campaign is forecast to allow us to scale production and realise our full market potential with these new users.

The rationale for this entry point is:

  • Product design used in food tray production is highly standardised, with fewer moulds required.
  • We hold existing relationships with niche primary producers who see our products’ features and benefits as enhancing their brand in the marketplace.
  • By increasing this offering, we can scale production with a lower price per unit, enabling us to continue market expansion into other sectors.
  • Initial target is a segment within the 250m trays used in New Zealand supermarkets, annually.

Our Unique Value Proposition

Influence on our core ingredient & value chain

Proprietary processes

Our sister company, Earthpac Starch Ltd, is the only manufacturer of food-grade potato starch in New Zealand. This process extracts product from a former waste stream and converts it into a valuable resource which is GE-free and sterile with no added chemicals.

Our products are easy on the planet, and so is the way we make them. Our proprietary manufacturing process emits no noxious fumes or toxic liquid waste and is free from dangerous substances like bisphenols or styrene.

Targeted product and performance

Ability to scale locally

From food serviceware to medical trays, these products are perfect for home compost:
  • 100% home compostable within five to eight weeks, with no toxins or harmful by-products
  • Outstanding product performance which is comparable or exceeds that of expanded polystyrene
  • Extremely durable - our trays can be frozen, microwaved and hold cold or hot liquids
Earthpac has a high-quality building under a long-term lease. It is equipped with a central crane for handling bulk product and mould changes. The floor area can accommodate the forecast expansion in production lines along with associated warehouse storage.

Intellectual property

Ability to license production offshore

Earthpac Ltd holds a provisional patent related to our proprietary injection-moulding technology along with a range of production trade secrets. We also have patent applications pending in NZ and Australia for the injector technology. The technology and the associated technical support lends itself to deployment in offshore potato processing plants. In the future, we expect that licencing, ongoing technical support and new product development will be the means to expand our commercial footprint. A Memorandum of Understanding is already in place with an Australian company to enter into a licence to manufacture the trays in Australia - terms to be finalised within 12 months.

 

Proposed Revenue Streams


Local Product Sales

  • New Zealand primary sector and potential to disrupt an annual 250m expanded polystyrene and plastic meat trays
  • Export products for markets with high environmental priorities or compliance requirements
  • Waste mitigation for retail, institution and convenience food
  • Medicinal trays for hospitals and pharmaceutical applications (existing/ongoing revenue stream)


Australia and Pacific Product Sales

  • Greatest medium-term potential with a similar market to New Zealand, but with more advanced environmental targets
  • Interest from the Pacific Islands as part of a focus on reducing their environmental footprint
  • Local markets for medicinal trays for hospitals and pharmaceutical applications


Technology Franchise Fees

  • Growth opportunity with a franchise model, supported by a regulatory environment to drive change and potential government support for green initiatives
  • Expectation that local manufacture of our home-compostable products will follow in Australia based upon the existing technology

Use of Your Investment Funds

We wish to raise a maximum of $2million though equity crowdfunding for an 18% share in Earthpac Ltd. This will be used to scale up production based around our current proprietary technology and deliver one full-scale commercial production line. If fully subscribed, we will make provision for additional production lines to be integrated in a further 12-18 months as expected demand increases, along with an investment in our sales and marketing resource.

Pre-raise company valuation $8,914,810
Total shares on offer 5,000,000
Price per share $0.40
Minimum pledge $500
Minimum raise $850,000
Maximum raise $2m

Capitalization Table

Pre Raise Valuation: $8,914,810

Current shares as of the date of this published information memorandum

 

Anticipated shares following a fully subscribed raise of $2,000.000


NB: Richards Williams is the majority shareholder in Potatopak Ltd
Share Class of Issue: At Earthpac, we believe your hard-earned investment dollar deserves to be respected. Therefore, this share issue will have the same full voting rights and potential for dividends as the existing shares.


Effect of Exercising Options

Company Options Effect – Earthpac Ltd in line with common industry practice may issue options to executives or others as a form of incentive to grow the share price or as recognition for a company benefit. An option is a right but not obligation to acquire a share in the future at a fixed price by a fixed date. A fixed or exercise price might commonly be set at the current price or a slight discount. If an option is not exercised there is no effect. If they are exercised, then the benefit is the price paid and the cost is the dilution from extra shares.

These 0ptions for the Shareholder considered the benefit of the contribution exceeding the cost or the alternative ways of compensation for the discount in rent payable. At the year end 31/03/2021 Shawlands Limited has a total of 2,072,075 options issued exercisable at varying dates in the future at 1 cents per share. Should Shaw lands Ltd exercise this option, Earthpac Ltd will have 28 days to elect to accept that right or repay the loan thus providing Earthpac Ltd the ability to act in the interests of all shareholders in terms of enhancing equity value

Detailed Application of Your Investment Funds

Plant and equipment
As our manufacturing configuration is modular, we can scale up as funding permits. In the scenario of achieving minimum funding, we aim to deliver:

  • One fully operational, injection-moulded laminating line setup

In the scenario of achieving maximum funding, we aim to deliver:

  • One fully operational, injection-moulded laminating line setup
  • Batch-mixing plant capable of supplying four injection-moulding lines to future-proof growth and reduce labour costs with the use of robotics

Business development
In order to support our expanded volume and range of products, we will bring in some required expertise through additional sales, marketing, production and administration staff. The above application is anticipated, however, the actual amounts may vary at the Board’s discretion.

Financial Forecast Summary

We envisage a modest income stream until 2023 while we commission the full-scale production line. In the initial period, it is our strategy to keep our product offering simple, with an initial focus on produce trays while we strive to embed production efficiency and quality into our processes.

As we progressively install our modular production lines, we predict an exponential increase in volumes per direct inputs, particularly labour, as we become more efficient and capture the benefits from increased integration of our technology.

This prospective financial information has been prepared by Paul Dodd and Associates Chartered Accountants. Paul Dodd holds 10% in Earthpac Ltd via Skyraider Trustee Services Ltd.

A comprehensive Financial Forecast can be found on page 26 of the Information Memorandum.

Cashflow Forecast Earthpac Ltd

Supporting Notes
Shares owned in Earthpac Starch Ltd have been recorded at historical cost.
We have made an allowance for a 6-month period to fully commission the 1st production line if funded under this equity raise.

Revenue is based upon a calculated production cycle time, with a minimal requirement for finished goods inventory.

The forecast price per unit is based upon market feedback.

We envisage a second capital raise of $2m post the successful commissioning of the full-scale production line.
These funds will be applied to business development and increasing production capacity via additional plant and equipment of 4 integrated production lines.

Key Risks and Mitigation

Key risks and mitigation table

The Earthpac InterCo Relationships

Our wider structure reflects the origins of our development and the commitment of the Cornerstone Investors. Each project phase, and its associated subsequent investment, has been supported extensively by the same individuals. This is separated for reasons of transparency and can be scaled up or down as the commercial opportunities arise, e.g., licensing of a specific technology or process.
When investing in this opportunity, you are investing in a group of associated businesses spanning the production of a commercially valuable raw material via our cornerstone holding in Earthpac Starch, home-compostable manufacturing capacity via Earthpac and the international franchise opportunities.

Interlocking Agreements

Ensuring continuity of supply

To support commercial transparency, the supply of starch from Earthpac Starch Ltd to Earthpac Ltd will be covered by a standalone and arm’s-length supply agreement, to be put in place with the following terms:

  • Duration of supply agreement – five-yearly renewable
  • Preferred supplier relationship whereby Earthpac Ltd orders are first ranking above all other customers
  • Price is fixed at 12-monthly intervals

Quality assurance
Products must meet the technical requirements as defined by Earthpac Ltd from time to time.

Alignment of revenue streams
All commercial sales and related costs of goods sold currently with Potatopak shall accrue to Earthpac Ltd immediately upon a successful PledgeMe campaign.

Shareholder loans, advances and liabilities
The founding shareholders have made significant capital advances on an ‘on demand’ basis. These have recently been placed on a structured term loan basis of two years interest only and interest and principal over the following three years. This reflecting their high level of confidence in the future and places the business on a sound capital structure. As presented in the cashflow we have made provision, but we are not obligated, for any early repayment of these from a subsequent capital raise outside of this PledgeMe campaign. No funds from this capital raise are to be used to repay any shareholder loans.

Ongoing shareholder relationships

Shareholder communication
Earthpac Ltd is committed to ensuring shareholders receive any corporate news and developments first. We’re committed to regular communication with our shareholders through email newsletters and on our social media channels. Each shareholder will receive Annual Financial Reports.

Trading shares
Currently, any shareholder wanting to sell their shares can do so privately, as per the terms and conditions listed in our Constitution. At this stage, this requires a first right of refusal to current shareholders.

Dividend Policy

Our current dividend policy is to retain profits for future use to drive sales growth and future profitability. The dividend policy will be reviewed annually by the Board, based on our growth requirements, investment needs in technology development and sales and marketing efforts. As we forecast to become profitable, the Board will consider the balance between current and future growth opportunities requiring reinvestment in the business and returning profits to shareholders in the form of dividends.

Forecasted Financial Data
The revenue and costs projected here have been taken from detailed 5-year modelling, with figures based on commissioning one production line, initially, followed by the commercialisation of the technology and an additional three lines commissioned.

The forecast financial information has been prepared by Paul Dodd and Associates Chartered Accountants. Paul Dodd is the principal of Paul Dodd and Associates, a Director of Earthpac Limited, Potatopak Limited and Earthpac Starch Limited. Paul Dodd is the sole shareholder of Skyraider Trustee Services which holds a 10% shareholding in Earthpac Limited.

Warning Statement – The Legal Stuff

This document has been prepared by Earthpac Limited with the purpose of sharing information about Earthpac’s share offer on PledgeMe. All efforts have been made to ensure the accuracy and reliability of the content as of the date of this document.

PledgeMe is licensed and regulated by the Financial Markets Authority, and the share offer made by Earthpac Limited will only be available for acceptance through the PledgeMe website.

Equity crowdfunding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of businesses is speculative and carries high risks. You may lose your entire investment and must be able to bear this risk without undue hardship. New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

Ask questions, read all information given carefully and seek independent financial advice before committing yourself.

Contact Information

Paul Dodd | Director
+64 21 669 350
[email protected]

Richard Williams | Founder and Director
+64 21 634 783
[email protected]

 

A Note from PledgeMe

We have completed Equifax checks on Earthpac Limited, and their Directors, as well as Google and Insolvency checks. There were no adverse findings.

Updates 4

Further Extension

05/05/2022 at 11:04 AM

Thank you so much to those of you who have committed to our campaign to bring this exciting project into commercial production.

We are currently in discussion with several potential large investors who see a huge potential in this New Zealand developed technology.

There are also three podcasts commencing this week as well as the continued radio advertising campaign which is creating a very favourable response.

We need those of you who have committed to this campaign to consider bringing your friends along for the journey as well and ask them to consider committing as you have.

With what is underway at present and the positive feedback that is coming through we have decided to extend the campaign to mid day on the 30th of May.

We look forward to getting the funds that we need to get this project underway.

You asked we listened

12/04/2022 at 4:42 PM

Dear pledgers and followers

Thank you so much for your support for Earthpac - it is heartening to see so many of you are willing to invest in our work, as we continue with our mission to rid the world of plastic packaging.

We've had some feedback from potential pledgers to our equity campaign, that we'd be even more accessible to our crowd if we lowered our minimum investment to $250. You spoke, and we listened! 

Please note that the share price remains the same - 0.40 cents a share. Our new minimum offer is now $250, for 625 shares in Earthpac Ltd.

If you have any questions, please just ask away - you can post a question on our campaign page, or you can get in touch with PledgeMe.

Kind regards,

Richard, Paul, and the Earthpac team

You need to pledge to see this update.

PROGRESS ON OUR GOAL TO BRING THIS INNOVATIVE PROJECT INTO COMMERCIAL PRODUCTION

30/03/2022 at 12:53 PM

Thank you pledgers, 90 of you have so far committed to $209,567 toward our capital raise. We really need your support for the innovative packaging project.

Please spread the word to all your friends. We must make changes now for the future of the environment.

From the Earthpac team

    Details

    Offer Details

    Current Valuation 8,914,810
    Raise Minimum 850,000
    Raise Maximum 2,000,000
    Share Price 0.40
    Minimum Pledge 250.00
    Maximum Shares Offered 5,000,000
    Explanation of valuation:

    The valuation has been determined at $8,914,810 using a hybrid methodology comprising:
    - 2025/26 Forecast Earnings Before Taxes, Depreciation and Amortization (EBITDA) times a multiplier of 4
    - An assigned value reflecting Earthpac’s patents held in NZ and Australia along with its actual investment in the R&D to-date.
    - An associated value attached to our 33% cornerstone holding in Earthpac Starch reflecting its positive cash flow from the sale of starch, along with the historical investment in the capital plant
    - Key patents held by Earthpac Starch recently lodged in NZ and Australia by our patent attorneys, AJ Park

    Financial Summary

    Prev Year Current Year Est. FY 2024 Est. FY 2025
    Revenue NZ $286,417 NZ $450,000 NZ $1,980,000 NZ $3,840,000
    Operating Expenses NZ $342,180 NZ $1,053,424 NZ $1,856,724 NZ $2,590,824
    EBITDA -NZ $41,377 -NZ $603,424 NZ $123,276 NZ $1,249,176
    Net Profit -NZ $55,763 -NZ $790,441 -NZ $199,899 NZ $867,753

    Company Details

    Company Name: Earthpac Ltd

    Company Number: 3670736

    Company Documents

    Documents no longer available to download, as this campaign has closed

    Director Details

    Name Role Profile URL Invested?
    Paul Dodd Director https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/3670736?backurl=H4sIAAAAAAAAAF3OwWoCQQwG4LfJxcOq4DEUUfFQD6XrC4RN1IFxZppktt23111RqMd8%2BX%2F4m0JnsSYkDn3gSrExIe0uHz%2FImXlWqEYwJ3VczOcQwzU4LlcgyYMP7ZRFIGYVs08ZfrMyQsn3StxkFoQu1%2BQ6vELHoch49JQ64S9KEtG1ClzH%2BNNB%2FgolFv4Wq9ENQXOUqbs%2BHOC%2BdzctGMX%2BU%2Bvk1faaa3l9tkEfjNR56GW09vJmdkIwxhtBbWELEwEAAA%3D%3D
    Richard Williams Director http://https://www.linkedin.com/in/richard-williams-10159b1b/

    Questions 14


    It’s sad to see this not reach its min target, I really don’t understand how it has not managed to be over the 2 mil mark. I am sorry for you guys, such a great product.

    Posted on 29-05-2022 by Jo Tagg

    Yes it is sad that we have not reached our target to bring this into commercial production in NZ.
    We have all worked so hard over 18 months to get the Pledgeme campaign running and the technology may very well go overseas and be lost to NZ. There is a lot of talk by the Government and members of the public about stopping plastic in the food industry but this campaign has proven that it is all talk and that there is no appetite to actually change.
    I would like to thank all of those who made the commitment by way of your pledge to put a line in the sand with plastic trays in the food industry and have a product developed in NZ from totally home compostable NZ produced potato starch.

    Answered on 29-05-2022 by Paul Dodd


    So, does this mean you only need to raise $425k?

    Posted on 24-05-2022 by Ed Connolly

    Yes it does to reach the minimum.

    Answered on 29-05-2022 by Paul Dodd


    Hi Paul, is the Govt's new Business Growth Fund up and running and a potential investor?

    Posted on 23-05-2022 by Ed Connolly

    Hi,
    Yes this is a potential source of funds but as with all Government funds they require equal contributions from the company. Once we have funding we will be exploring all Government funding options

    Answered on 24-05-2022 by Paul Dodd


    May I ask what happens to the pledges if the minimum target is not met?
    If there is an overseas investment proposal, what happens to the pledges?
    Will the pledges be included or excluded?

    Posted on 22-05-2022 by Kok Sin Tan

    Hi,
    If the minimum raise does not occur then the campaign cease to exist and the pledges are void. If we obtain an overseas investment proposal before the cutoff of 30 May then that proposal will be part of the minimum $850k along with the other pledges.

    Answered on 23-05-2022 by Paul Dodd


    Hi
    Could you provide more details on Shawlands Ltd and the options they are holding with an exercise price of 1ct? cheers richard

    Posted on 19-05-2022 by Kok Sin Tan

    Hi.
    Shaw Lands is the landlord and they have been supporting Earthpac Ltd over the last few years during the R and D phase of development of the process with significant rent assistance. options have been granted at this time but if sufficient cash flow is generated in the future these options may be brought back by the company

    Answered on 19-05-2022 by Paul Dodd


    Hi, I have already made a Pledge but concerned you will not reach your minimum target. Are you talking to any large investors that may get you across the line? If not, what are the implications? Regards Ed

    Posted on 03-05-2022 by Ed Connolly

    Good morning. Yes we are currently talking to several parties who are indicating making a large pledge. If the minimum raise is not achieved we are looking at an overseas investment proposal that has been discussed that will see the technology and manufacturing leave New Zealand. Not what we really want to occur.

    Answered on 04-05-2022 by Paul Dodd


    Hi, your project looks great. I'd like to know what the difference is between investing in shares and equity. Thanks

    Posted on 16-04-2022 by Sandy Jones

    Hi,
    The two are the same type of investment. This campaign is for the issue of shares that will form part of the total equity of the company

    Answered on 18-04-2022 by Paul Dodd


    Hi, I am really interested in the Campaign as I think we all agree there is a massive opportunity here that can be a win win for the planet. I had a question around your liners - if these are based on PLA Starch (which I picked up from your video) will these be home compostable? My laymans understanding is that at ambient temperatures, moisture and UV it can be c. 80 years to biodegrade PLA. It does seem to be a solution for industrial composting though. Can you walk me through the technology for your liners and how they sit with the rest of the product and biodegradability? A good home compostable and waterproof container would truly be a game changer. Thanks again,

    Posted on 18-03-2022 by Blair

    Thank you Blair for your interest in our process and fund raising efforts.
    Our trays are waterproofed using a PLA based film. The film we have developed in conjunction with Convex Plastics is only 20 microns thick and will home compost. The film has been certified to EN 13432 Composting standards and will meet home composting standards.

    Answered on 20-03-2022 by Paul Dodd


    Can you quantify the capabilities of the injection-moulded laminating line that this campaign will fund? How many basic produce trays per annum will it have the capacity to make?

    Posted on 16-03-2022 by Geoffrey Pritchard

    Thanks for the enquiry regarding the capacity of the injection moulder and laminating line.
    The setup is two injection moulders feeding one laminator with robotics. This setup can produce 5 million small trays per annum.

    Answered on 16-03-2022 by Paul Dodd


    Most of your 2021-2022 revenue is listed in page 25 of your Information Memorandum as from "Small Meat Trays", which does not have "Current Product" in brackets alongside it as "Hospital Trays" does. Is this a mistake, or are you hoping for these sales this financial year in a product you don't yet produce?

    Posted on 13-03-2022 by Charlie

    Thank you Charlie for pointing this out. Unfortunately the years on the heading in the forecast Profit and Loss had not updated to the latest version. No changes were required to any of the numbers. The headings now align with the forecast balance sheet and cash flows. An updated IM has been loaded onto the Pledgeme site. Once again thank you for pointing this out

    Answered on 15-03-2022 by Paul Dodd


    I would love to be in a position to pledge $500 but this is way out of my reach. Is there no possibility of smaller pledges please?

    Posted on 10-03-2022 by Melanie Jeffs Gresty

    Hi . Thank you for your enquiry regarding a lower minimum pledge unfortunately at this time we are unable to look at less than the minimum of $500. Please keep in touch as this project is a game changer to produce home compostable packaging from raw materials sourced in NZ.

    Answered on 10-03-2022 by Paul Dodd


    Hi there, I really like this idea so well done. Just had a couple of questions please.
    1. It says that the potato starch (supplied by Earthpac starch ltd) is from the wasteproducts which keeps the costs down. If this takes off will there be enough starch to supply the projected production from waste products or will it need to be sourced from elsewhere at higher cost?
    2. Does Earthpac Ltd have any rights to the laminated compostable film that is supplied by Convex Plastics Hamilton or is it simply a customer? It is mentioned a few times but I am interested in knowing if this tech is part of the Earthpac Ltd business or if it is reliant on Convex plastics to supply? It says it was a game changer so I am wanting to know if the IP for the tray and film are both owned by Earthpac Ltd?
    Thank you for your time, I am quite interested.

    Posted on 10-03-2022 by Ben Kofoed

    Thank you for your interest in the project we have used the market value at the time of the forecasts for raw material costs. The production of potato starch by ESL is currently far in excess of the needs of EL for the foreseeable future.
    The laminated film for waterproofing was developed in conjunction Convex and EL has a joint patent application for the film.
    The IP for the tray is owned by EL with parents pending in NZ and Australia.

    Answered on 10-03-2022 by Paul Dodd


    I too really like the concept and I look forward to your answering Andrew's questions before I commit to investing. Thank you!

    Posted on 09-03-2022 by Dominique Leeming

    Hi, firstly really like the concept and plays into a big macro sustainability trend but a few questions:
    1. You reference the market size in NZ effectively being 250m trays but this is based on 2015 data, do you have any more recent data point? Given the consumer trend to consuming less meat I presume this number would have come down and be declining?
    2. Is the price point materially similar for your trays vs competitors recyclable trays?
    3. Are there other potential suppliers of starch other than Earthpac Starch? and how will you deal with the pricing between the two entities (other than it being fixed price annually)
    4. What is the sales/GTM strategy - do you have to get into Foodstuffs and/or Woolworths NZ for this to be viable?
    4. On the forecasts it would be good to understand these in more detail - what date is the FY end; what is the current run-rate revenue and operating costs; what volumes are assumed to be hit to achieve the revenue targets; what is the GP% in Potatopak (to provide context on if the GP% is reasonable); what costs sit in COGS; how many FTEs are there
    5. Valuation - seems steep at 72x forward EBITDA and 4.5x forward revenue. Do you have any comparable company transactions to justify the valuation

    Posted on 09-03-2022 by Andrew

    Thank you for your highly analytical questions regarding our project.
    1. The 250 million trays from 2015 data have been used to demonstrate the scale of the potential market. Current data is not available as to the volume of trays used in NZ but will have increased since 2015, due to increased population and the move by vegetable suppliers to package their products on trays for the supermarkets. The key point is that the product and its technology are not simply limited to the NZ meat tray market but much wider consumer applications.
    2. Our price is marginally greater than a high volume plastic tray but it is important to note that we do not see ourselves as solely competing on a commodity price. Rather our value in the market place reflects our unique USP. The environmental issues regarding plastic that maybe recyclable vs our home compostable tray far outweighs any marginal cost difference.
    3. Earthpac Starch Ltd (ESL) is owned 33% by Earthpac Ltd (EL) with the balance of the shareholders in ESL being shareholders in EL either directly or indirectly. The alternative supply for potato starch are overseas suppliers. This source is subject to price fluctuation and supply chain issues. The directors of ESL and EL have a commonality and are all driven by the goal of the production of the EL compostable trays using ESL starch.
    4. Our forecasts are not dependent upon Foodstuffs and Woolworths NZ for this project to be viable. EL has strong solid support from specialised food manufacturers who want an environmental USP with which to market their products. EL has had many enquiries from overseas for our trays and has entered a MoU with and Australian business to establish a franchised operation in Australia. EL is therefore not restricted to the supermarket chains in NZ to be viable.
    5. Our COGS include the usual costs that you would expect in a manufacturing business. Raw materials, labour, energy and direct manufacturing overheads. The FTE is sensitive information as the project will be automated as far as practical to ensure that up scaling of the operation will provide economies of scale to the business. The GM as shown in the forecast as provided in the IM is in excess of 54%
    6. The basis of the valuation has been agreed by the directors on a number of factors and have been stated on page 21 of the Information Memorandum. These factors are considered appropriate, given the investment in technology and as held within the patents.
    As stated we have used the 2025/26 EBITDA and a multiplier of 4 as this represents post major capital and phase 2 production revenues and in addition there is some value attached to the significant investment in R and D.
    This basis is conservative as we have not included any increased valuation in the cornerstone investment in ESL to ensure raw material supply nor any potential licencing value from the MoU with the Australian entity.

    Answered on 09-03-2022 by Paul Dodd

    Pledgers 166

    Nicholas Walshe
    2022-03-10 11:56:50 +1300
    Mike Durbin
    2022-03-10 11:53:48 +1300
    Rob McCaw
    2022-03-10 11:48:40 +1300
    John Kirkland
    2022-03-10 11:48:27 +1300
    Yvonne Gilmore
    2022-03-10 11:47:48 +1300

    "Sustainable packaging is a must in the journey to become sustainable consumers."

    Graeme Fair
    2022-03-10 11:45:59 +1300
    Mary Stevens
    2022-03-10 11:41:24 +1300
    Dope Honey Limited
    2022-03-10 11:40:42 +1300
    greg ford
    2022-03-10 11:36:46 +1300
    Hugh
    2022-03-10 11:33:37 +1300
    nitin yadav
    2022-03-10 11:12:07 +1300
    [email protected]
    2022-03-10 07:57:09 +1300

    "Good luck"

    Tammy Peacock
    2022-03-09 21:04:28 +1300

    "Be good to see all supermarket meat trays replaced with compostable means! My worm farm can’t wait."

    Junming Mai
    2022-03-09 18:16:22 +1300
    Michael Lane
    2022-03-09 17:08:49 +1300
    Vicki Skill
    2022-03-09 09:13:54 +1300

    Earthpac Limited

    An Elegant New Zealand Solution To The Plastic Problem

    At Earthpac, we know that we can’t start to solve our global waste problem without everyone’s help. That’s why we’ve spent more than 20 years developing 100% home-compostable, food-safe packaging made from all-natural potato starch, recycled from the production processes of some of our favorite potato products.

    Earthpac’s products are durable, versatile, food-safe and 100% home-compostable.
    You can even eat them (if you wanted to)!

    We’re already working in hospitals by offsetting hundreds of tonnes of waste from plastic medical trays. With the recent development of a fit-for-purpose, laminated, compostable film, we’re now able to make durable, waterproof and temperature-resistant food packaging for meat and fresh produce suppliers whose earth-conscious customers want much better solutions than polystyrene and plastic.

    It’s a perfect circle of offsetting food waste to reduce plastic production to package and preserve food.

    What we need now is to get these great products to more people by increasing our production capacity. The success of this $2m crowdfunding campaign will help us with our forecast commercial production line and enable us to help divert 10 million plastic trays from New Zealand’s landfills every year.

    The Plastic Problem

    For too long, plastic has been the default choice for packaging. It’s durable, it’s cheap to produce, it’s hugely versatile and it preserves our products for much longer.

    Unfortunately, plastic also takes hundreds of years to decompose in landfill, it’s killing our wildlife, most of it is single-use and millions of tonnes of it have made their way into our oceans. Recycling has helped curb the environmental devastation but, when 39% of recyclable products end up in landfill, this just isn’t enough.

    In recent years, we’ve seen a range of better options for compostable packaging, and thousands of conscious consumers have already made this a purchasing priority. But not all compostable products are created equal.1

    The plastic problem

    1 www.wasteminz.org.nz | 2 + 3 ourworldindata.org | 4 www.wasteminz.org.nz | 5 theregister.co.nz | 6 colliercountyfl.gov

    The End of the Linear Economy

    We see the linear economy as a waste-producing machine that accelerates carbon emissions and resource depletion by driving us to endlessly extract and manufacture new resources, products and stuff, rather than conserving and reusing what we already have. We believe in the need to transition to an economy where waste, pollution and greenhouse gases are designed out, materials are kept in circulation and natural systems are regenerated.

    Recycling is the option we use when we’ve failed to prevent and reduce waste or reuse resources. If these are recycled at all, it’s more accurate to say they are ‘downcycled’ (made into different products that aren’t, themselves, recycled) - not exactly a closed-loop system.* Even when it works, recycling practices still pollute, create waste and use massive amounts of energy. This is why waste-offsetting and home-composting are going to be critical to creating circular economies, and reducing the devastating environmental impacts of the products we consume.

    Life Cycle

    Our business starts from the ground up, literally. We don’t just create products that are more environmentally friendly after use; we are committed to making every step of the product lifecycle pro-environment. We fully embrace the earth-to-earth model and are continually working to refine our processes, improve our products and minimise our footprint.

    Life cycle of Earthpac trays

    The Opportunity

    Earthpac presents an opportunity to invest in the local production of home-compostable packaging products using 100% New Zealand raw materials. Our existing production is by way of compression moulding of trays for hospitals; with the recent development of a home-compostable laminated film, we have the opportunity now, with your support, to create waterproof trays using a cutting-edge injection moulding process.

    Our pilot plant has demonstrated technical and commercial feasibility of the proposed production of these new, laminated trays. We have a very clear product development focus initially on meat and produce trays, as this market requires high volumes of similar products. They are highly responsive to the clear customer preference for sustainable packaging and are early adopters of alternative and innovative products in the space.

    We already operate a small production plant in a strategically located facility in Auckland which offers sufficient scope for production expansion, warehousing, logistics and office space. With your investment, we wish to increase our capacity and capability through commercial production in New Zealand and via a franchise model for offshore opportunities.

    • 100% home compostable – can be composted in your own back garden and will completely break down within 5-8 weeks
    • Our packaging is made from 100% locally grown potatoes – the result is toxin-free, with no harmful by-products
    • Outstanding durability and insulation – can be frozen, microwaved and hold both hot and cold liquids, raw meats and vegetables
    • The starch is extracted from a food processing waste stream, resulting in a manufacturing process which is carbon negative

    The Global Problem is Our Opportunity

    In 2018, Australia established the ambitious 2025 National Packaging Targets.

    100% of packaging must be reusable, recyclable or compostable by 2025, with 70% of plastic packaging being recycled or composted.*

    39% of New Zealand’s recyclable household plastic bottles and containers go to landfills.

    Simply replacing polystyrene products with recyclable plastic products, while better, is not the solution.*

    Emerging economies are no longer willing to accept the world’s waste.

    At a meeting in Basel in May 2019, 187 countries agreed to dramatically restrict international trade in scrap plastics to prevent plastics dumping.*

    The Team

    Richard Williams
    Founder and Director

    Richard is the Founder of Earthpac. His passion to see a significant reduction in waste in landfills drove him to spend the last 15 years developing the compostable, environmentally friendly, food-safe packaging that has now become known as Earthpac. Richard comes from an aircraft engineering background. In 2007, he was invited to join the ranks of 101 Incredible Kiwis as an eco-entrepreneur.

    Paul Dodd
    Director

    Paul was appointed to the Board as Chairperson in 2012. Paul’s management and financial expertise have been harnessed to bring Earthpac to full commercial realisation. Paul is a Director of Paul Dodd and Associates Limited, a successful accounting practice specialising in compliance and consulting to a diverse range of national and international clients.

    Steve Habershon
    Consultant

    Steve is a manufacturing consultant with over 40 years’ experience in manufacturing as a business owner and an employee of a large multinational company. His background includes tool-making and general and technical management. Steve now heads up his own consultancy business, Trakax International Limited.

     

    Our Journey

    Like our products, our journey has been organic in its development as we have experimented, learned and reapplied ourselves to the task ahead. After spending over $3m in R&D, we and our technology have reached a major milestone. With a functioning small-scale production line delivering outstanding products, we now enter the commercialising phase.

    19972000
    20072011
    20142019
    2021

    The Forecast Road Ahead

    Why Now?

    Historically, Earthpac’s compression-moulded products have been used in the medical field, in particular through compostable drug trays at hospitals in Auckland and Timaru. Auckland DHB, alone, uses 175k single-use plastic trays every year. With Earthpac’s products, last year we helped them divert more than 11 tonnes of plastic from landfill, with more than 3 tonnes of Earthpac trays converted into compost. This is based on the number of our trays sold to the ADHB and the known weight of the plastic trays previously used.

    Over the last 3 years, we’ve been working with Convex Plastics in Hamilton on the development of a laminated, compostable film and new in-house processing technology to incorporate it in the next generation of Earthpac products. This enables us now to create highly functional moisture- and heat-resistant food packaging that can still biodegrade in your home compost in 5-8 weeks. Simply put, the addition of this certified compostable film is a game-changer for us.

    We are now able to produce small batches of injection-moulded, laminated trays from our proprietary processing plant that are waterproof, durable and suitable for the food packaging market. Our target market is primary producers such as organic or niche meat producers in both export and local markets. The success of this campaign is forecast to allow us to scale production and realise our full market potential with these new users.

    The rationale for this entry point is:

    • Product design used in food tray production is highly standardised, with fewer moulds required.
    • We hold existing relationships with niche primary producers who see our products’ features and benefits as enhancing their brand in the marketplace.
    • By increasing this offering, we can scale production with a lower price per unit, enabling us to continue market expansion into other sectors.
    • Initial target is a segment within the 250m trays used in New Zealand supermarkets, annually.

    Our Unique Value Proposition

    Influence on our core ingredient & value chain

    Proprietary processes

    Our sister company, Earthpac Starch Ltd, is the only manufacturer of food-grade potato starch in New Zealand. This process extracts product from a former waste stream and converts it into a valuable resource which is GE-free and sterile with no added chemicals.

    Our products are easy on the planet, and so is the way we make them. Our proprietary manufacturing process emits no noxious fumes or toxic liquid waste and is free from dangerous substances like bisphenols or styrene.

    Targeted product and performance

    Ability to scale locally

    From food serviceware to medical trays, these products are perfect for home compost:
    • 100% home compostable within five to eight weeks, with no toxins or harmful by-products
    • Outstanding product performance which is comparable or exceeds that of expanded polystyrene
    • Extremely durable - our trays can be frozen, microwaved and hold cold or hot liquids
    Earthpac has a high-quality building under a long-term lease. It is equipped with a central crane for handling bulk product and mould changes. The floor area can accommodate the forecast expansion in production lines along with associated warehouse storage.

    Intellectual property

    Ability to license production offshore

    Earthpac Ltd holds a provisional patent related to our proprietary injection-moulding technology along with a range of production trade secrets. We also have patent applications pending in NZ and Australia for the injector technology. The technology and the associated technical support lends itself to deployment in offshore potato processing plants. In the future, we expect that licencing, ongoing technical support and new product development will be the means to expand our commercial footprint. A Memorandum of Understanding is already in place with an Australian company to enter into a licence to manufacture the trays in Australia - terms to be finalised within 12 months.

     

    Proposed Revenue Streams


    Local Product Sales

    • New Zealand primary sector and potential to disrupt an annual 250m expanded polystyrene and plastic meat trays
    • Export products for markets with high environmental priorities or compliance requirements
    • Waste mitigation for retail, institution and convenience food
    • Medicinal trays for hospitals and pharmaceutical applications (existing/ongoing revenue stream)


    Australia and Pacific Product Sales

    • Greatest medium-term potential with a similar market to New Zealand, but with more advanced environmental targets
    • Interest from the Pacific Islands as part of a focus on reducing their environmental footprint
    • Local markets for medicinal trays for hospitals and pharmaceutical applications


    Technology Franchise Fees

    • Growth opportunity with a franchise model, supported by a regulatory environment to drive change and potential government support for green initiatives
    • Expectation that local manufacture of our home-compostable products will follow in Australia based upon the existing technology

    Use of Your Investment Funds

    We wish to raise a maximum of $2million though equity crowdfunding for an 18% share in Earthpac Ltd. This will be used to scale up production based around our current proprietary technology and deliver one full-scale commercial production line. If fully subscribed, we will make provision for additional production lines to be integrated in a further 12-18 months as expected demand increases, along with an investment in our sales and marketing resource.

    Pre-raise company valuation $8,914,810
    Total shares on offer 5,000,000
    Price per share $0.40
    Minimum pledge $500
    Minimum raise $850,000
    Maximum raise $2m

    Capitalization Table

    Pre Raise Valuation: $8,914,810

    Current shares as of the date of this published information memorandum

     

    Anticipated shares following a fully subscribed raise of $2,000.000


    NB: Richards Williams is the majority shareholder in Potatopak Ltd
    Share Class of Issue: At Earthpac, we believe your hard-earned investment dollar deserves to be respected. Therefore, this share issue will have the same full voting rights and potential for dividends as the existing shares.


    Effect of Exercising Options

    Company Options Effect – Earthpac Ltd in line with common industry practice may issue options to executives or others as a form of incentive to grow the share price or as recognition for a company benefit. An option is a right but not obligation to acquire a share in the future at a fixed price by a fixed date. A fixed or exercise price might commonly be set at the current price or a slight discount. If an option is not exercised there is no effect. If they are exercised, then the benefit is the price paid and the cost is the dilution from extra shares.

    These 0ptions for the Shareholder considered the benefit of the contribution exceeding the cost or the alternative ways of compensation for the discount in rent payable. At the year end 31/03/2021 Shawlands Limited has a total of 2,072,075 options issued exercisable at varying dates in the future at 1 cents per share. Should Shaw lands Ltd exercise this option, Earthpac Ltd will have 28 days to elect to accept that right or repay the loan thus providing Earthpac Ltd the ability to act in the interests of all shareholders in terms of enhancing equity value

    Detailed Application of Your Investment Funds

    Plant and equipment
    As our manufacturing configuration is modular, we can scale up as funding permits. In the scenario of achieving minimum funding, we aim to deliver:

    • One fully operational, injection-moulded laminating line setup

    In the scenario of achieving maximum funding, we aim to deliver:

    • One fully operational, injection-moulded laminating line setup
    • Batch-mixing plant capable of supplying four injection-moulding lines to future-proof growth and reduce labour costs with the use of robotics

    Business development
    In order to support our expanded volume and range of products, we will bring in some required expertise through additional sales, marketing, production and administration staff. The above application is anticipated, however, the actual amounts may vary at the Board’s discretion.

    Financial Forecast Summary

    We envisage a modest income stream until 2023 while we commission the full-scale production line. In the initial period, it is our strategy to keep our product offering simple, with an initial focus on produce trays while we strive to embed production efficiency and quality into our processes.

    As we progressively install our modular production lines, we predict an exponential increase in volumes per direct inputs, particularly labour, as we become more efficient and capture the benefits from increased integration of our technology.

    This prospective financial information has been prepared by Paul Dodd and Associates Chartered Accountants. Paul Dodd holds 10% in Earthpac Ltd via Skyraider Trustee Services Ltd.

    A comprehensive Financial Forecast can be found on page 26 of the Information Memorandum.

    Cashflow Forecast Earthpac Ltd

    Supporting Notes
    Shares owned in Earthpac Starch Ltd have been recorded at historical cost.
    We have made an allowance for a 6-month period to fully commission the 1st production line if funded under this equity raise.

    Revenue is based upon a calculated production cycle time, with a minimal requirement for finished goods inventory.

    The forecast price per unit is based upon market feedback.

    We envisage a second capital raise of $2m post the successful commissioning of the full-scale production line.
    These funds will be applied to business development and increasing production capacity via additional plant and equipment of 4 integrated production lines.

    Key Risks and Mitigation

    Key risks and mitigation table

    The Earthpac InterCo Relationships

    Our wider structure reflects the origins of our development and the commitment of the Cornerstone Investors. Each project phase, and its associated subsequent investment, has been supported extensively by the same individuals. This is separated for reasons of transparency and can be scaled up or down as the commercial opportunities arise, e.g., licensing of a specific technology or process.
    When investing in this opportunity, you are investing in a group of associated businesses spanning the production of a commercially valuable raw material via our cornerstone holding in Earthpac Starch, home-compostable manufacturing capacity via Earthpac and the international franchise opportunities.

    Interlocking Agreements

    Ensuring continuity of supply

    To support commercial transparency, the supply of starch from Earthpac Starch Ltd to Earthpac Ltd will be covered by a standalone and arm’s-length supply agreement, to be put in place with the following terms:

    • Duration of supply agreement – five-yearly renewable
    • Preferred supplier relationship whereby Earthpac Ltd orders are first ranking above all other customers
    • Price is fixed at 12-monthly intervals

    Quality assurance
    Products must meet the technical requirements as defined by Earthpac Ltd from time to time.

    Alignment of revenue streams
    All commercial sales and related costs of goods sold currently with Potatopak shall accrue to Earthpac Ltd immediately upon a successful PledgeMe campaign.

    Shareholder loans, advances and liabilities
    The founding shareholders have made significant capital advances on an ‘on demand’ basis. These have recently been placed on a structured term loan basis of two years interest only and interest and principal over the following three years. This reflecting their high level of confidence in the future and places the business on a sound capital structure. As presented in the cashflow we have made provision, but we are not obligated, for any early repayment of these from a subsequent capital raise outside of this PledgeMe campaign. No funds from this capital raise are to be used to repay any shareholder loans.

    Ongoing shareholder relationships

    Shareholder communication
    Earthpac Ltd is committed to ensuring shareholders receive any corporate news and developments first. We’re committed to regular communication with our shareholders through email newsletters and on our social media channels. Each shareholder will receive Annual Financial Reports.

    Trading shares
    Currently, any shareholder wanting to sell their shares can do so privately, as per the terms and conditions listed in our Constitution. At this stage, this requires a first right of refusal to current shareholders.

    Dividend Policy

    Our current dividend policy is to retain profits for future use to drive sales growth and future profitability. The dividend policy will be reviewed annually by the Board, based on our growth requirements, investment needs in technology development and sales and marketing efforts. As we forecast to become profitable, the Board will consider the balance between current and future growth opportunities requiring reinvestment in the business and returning profits to shareholders in the form of dividends.

    Forecasted Financial Data
    The revenue and costs projected here have been taken from detailed 5-year modelling, with figures based on commissioning one production line, initially, followed by the commercialisation of the technology and an additional three lines commissioned.

    The forecast financial information has been prepared by Paul Dodd and Associates Chartered Accountants. Paul Dodd is the principal of Paul Dodd and Associates, a Director of Earthpac Limited, Potatopak Limited and Earthpac Starch Limited. Paul Dodd is the sole shareholder of Skyraider Trustee Services which holds a 10% shareholding in Earthpac Limited.

    Warning Statement – The Legal Stuff

    This document has been prepared by Earthpac Limited with the purpose of sharing information about Earthpac’s share offer on PledgeMe. All efforts have been made to ensure the accuracy and reliability of the content as of the date of this document.

    PledgeMe is licensed and regulated by the Financial Markets Authority, and the share offer made by Earthpac Limited will only be available for acceptance through the PledgeMe website.

    Equity crowdfunding is risky. Issuers using this facility include new or rapidly growing ventures. Investment in these types of businesses is speculative and carries high risks. You may lose your entire investment and must be able to bear this risk without undue hardship. New Zealand law normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision. The usual rules do not apply to offers by issuers using this facility. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

    Ask questions, read all information given carefully and seek independent financial advice before committing yourself.

    Contact Information

    Paul Dodd | Director
    +64 21 669 350
    [email protected]

    Richard Williams | Founder and Director
    +64 21 634 783
    [email protected]

     

    A Note from PledgeMe

    We have completed Equifax checks on Earthpac Limited, and their Directors, as well as Google and Insolvency checks. There were no adverse findings.

    Further Extension

    05/05/2022 at 11:04 AM

    Thank you so much to those of you who have committed to our campaign to bring this exciting project into commercial production.

    We are currently in discussion with several potential large investors who see a huge potential in this New Zealand developed technology.

    There are also three podcasts commencing this week as well as the continued radio advertising campaign which is creating a very favourable response.

    We need those of you who have committed to this campaign to consider bringing your friends along for the journey as well and ask them to consider committing as you have.

    With what is underway at present and the positive feedback that is coming through we have decided to extend the campaign to mid day on the 30th of May.

    We look forward to getting the funds that we need to get this project underway.

    You asked we listened

    12/04/2022 at 4:42 PM

    Dear pledgers and followers

    Thank you so much for your support for Earthpac - it is heartening to see so many of you are willing to invest in our work, as we continue with our mission to rid the world of plastic packaging.

    We've had some feedback from potential pledgers to our equity campaign, that we'd be even more accessible to our crowd if we lowered our minimum investment to $250. You spoke, and we listened! 

    Please note that the share price remains the same - 0.40 cents a share. Our new minimum offer is now $250, for 625 shares in Earthpac Ltd.

    If you have any questions, please just ask away - you can post a question on our campaign page, or you can get in touch with PledgeMe.

    Kind regards,

    Richard, Paul, and the Earthpac team

    You need to pledge to see this update.

    PROGRESS ON OUR GOAL TO BRING THIS INNOVATIVE PROJECT INTO COMMERCIAL PRODUCTION

    30/03/2022 at 12:53 PM

    Thank you pledgers, 90 of you have so far committed to $209,567 toward our capital raise. We really need your support for the innovative packaging project.

    Please spread the word to all your friends. We must make changes now for the future of the environment.

    From the Earthpac team

      Offer Details

      Current Valuation 8,914,810
      Raise Minimum 850,000
      Raise Maximum 2,000,000
      Share Price 0.40
      Minimum Pledge 250.00
      Maximum Shares Offered 5,000,000
      Explanation of valuation:

      The valuation has been determined at $8,914,810 using a hybrid methodology comprising:
      - 2025/26 Forecast Earnings Before Taxes, Depreciation and Amortization (EBITDA) times a multiplier of 4
      - An assigned value reflecting Earthpac’s patents held in NZ and Australia along with its actual investment in the R&D to-date.
      - An associated value attached to our 33% cornerstone holding in Earthpac Starch reflecting its positive cash flow from the sale of starch, along with the historical investment in the capital plant
      - Key patents held by Earthpac Starch recently lodged in NZ and Australia by our patent attorneys, AJ Park

      Financial Summary

      Prev Year Current Year Est. FY 2024 Est. FY 2025
      Revenue NZ $286,417 NZ $450,000 NZ $1,980,000 NZ $3,840,000
      Operating Expenses NZ $342,180 NZ $1,053,424 NZ $1,856,724 NZ $2,590,824
      EBITDA -NZ $41,377 -NZ $603,424 NZ $123,276 NZ $1,249,176
      Net Profit -NZ $55,763 -NZ $790,441 -NZ $199,899 NZ $867,753

      Company Details

      Company Name: Earthpac Ltd

      Company Number: 3670736

      Company Documents

      Documents no longer available to download, as this campaign has closed

      Director Details

      Name Role Profile URL Invested?
      Paul Dodd Director https://app.companiesoffice.govt.nz/companies/app/ui/pages/companies/3670736?backurl=H4sIAAAAAAAAAF3OwWoCQQwG4LfJxcOq4DEUUfFQD6XrC4RN1IFxZppktt23111RqMd8%2BX%2F4m0JnsSYkDn3gSrExIe0uHz%2FImXlWqEYwJ3VczOcQwzU4LlcgyYMP7ZRFIGYVs08ZfrMyQsn3StxkFoQu1%2BQ6vELHoch49JQ64S9KEtG1ClzH%2BNNB%2FgolFv4Wq9ENQXOUqbs%2BHOC%2BdzctGMX%2BU%2Bvk1faaa3l9tkEfjNR56GW09vJmdkIwxhtBbWELEwEAAA%3D%3D
      Richard Williams Director http://https://www.linkedin.com/in/richard-williams-10159b1b/

      It’s sad to see this not reach its min target, I really don’t understand how it has not managed to be over the 2 mil mark. I am sorry for you guys, such a great product.

      Posted on 29-05-2022 by Jo Tagg

      Yes it is sad that we have not reached our target to bring this into commercial production in NZ.
      We have all worked so hard over 18 months to get the Pledgeme campaign running and the technology may very well go overseas and be lost to NZ. There is a lot of talk by the Government and members of the public about stopping plastic in the food industry but this campaign has proven that it is all talk and that there is no appetite to actually change.
      I would like to thank all of those who made the commitment by way of your pledge to put a line in the sand with plastic trays in the food industry and have a product developed in NZ from totally home compostable NZ produced potato starch.

      Answered on 29-05-2022 by Paul Dodd


      So, does this mean you only need to raise $425k?

      Posted on 24-05-2022 by Ed Connolly

      Yes it does to reach the minimum.

      Answered on 29-05-2022 by Paul Dodd


      Hi Paul, is the Govt's new Business Growth Fund up and running and a potential investor?

      Posted on 23-05-2022 by Ed Connolly

      Hi,
      Yes this is a potential source of funds but as with all Government funds they require equal contributions from the company. Once we have funding we will be exploring all Government funding options

      Answered on 24-05-2022 by Paul Dodd


      May I ask what happens to the pledges if the minimum target is not met?
      If there is an overseas investment proposal, what happens to the pledges?
      Will the pledges be included or excluded?

      Posted on 22-05-2022 by Kok Sin Tan

      Hi,
      If the minimum raise does not occur then the campaign cease to exist and the pledges are void. If we obtain an overseas investment proposal before the cutoff of 30 May then that proposal will be part of the minimum $850k along with the other pledges.

      Answered on 23-05-2022 by Paul Dodd


      Hi
      Could you provide more details on Shawlands Ltd and the options they are holding with an exercise price of 1ct? cheers richard

      Posted on 19-05-2022 by Kok Sin Tan

      Hi.
      Shaw Lands is the landlord and they have been supporting Earthpac Ltd over the last few years during the R and D phase of development of the process with significant rent assistance. options have been granted at this time but if sufficient cash flow is generated in the future these options may be brought back by the company

      Answered on 19-05-2022 by Paul Dodd


      Hi, I have already made a Pledge but concerned you will not reach your minimum target. Are you talking to any large investors that may get you across the line? If not, what are the implications? Regards Ed

      Posted on 03-05-2022 by Ed Connolly

      Good morning. Yes we are currently talking to several parties who are indicating making a large pledge. If the minimum raise is not achieved we are looking at an overseas investment proposal that has been discussed that will see the technology and manufacturing leave New Zealand. Not what we really want to occur.

      Answered on 04-05-2022 by Paul Dodd


      Hi, your project looks great. I'd like to know what the difference is between investing in shares and equity. Thanks

      Posted on 16-04-2022 by Sandy Jones

      Hi,
      The two are the same type of investment. This campaign is for the issue of shares that will form part of the total equity of the company

      Answered on 18-04-2022 by Paul Dodd


      Hi, I am really interested in the Campaign as I think we all agree there is a massive opportunity here that can be a win win for the planet. I had a question around your liners - if these are based on PLA Starch (which I picked up from your video) will these be home compostable? My laymans understanding is that at ambient temperatures, moisture and UV it can be c. 80 years to biodegrade PLA. It does seem to be a solution for industrial composting though. Can you walk me through the technology for your liners and how they sit with the rest of the product and biodegradability? A good home compostable and waterproof container would truly be a game changer. Thanks again,

      Posted on 18-03-2022 by Blair

      Thank you Blair for your interest in our process and fund raising efforts.
      Our trays are waterproofed using a PLA based film. The film we have developed in conjunction with Convex Plastics is only 20 microns thick and will home compost. The film has been certified to EN 13432 Composting standards and will meet home composting standards.

      Answered on 20-03-2022 by Paul Dodd


      Can you quantify the capabilities of the injection-moulded laminating line that this campaign will fund? How many basic produce trays per annum will it have the capacity to make?

      Posted on 16-03-2022 by Geoffrey Pritchard

      Thanks for the enquiry regarding the capacity of the injection moulder and laminating line.
      The setup is two injection moulders feeding one laminator with robotics. This setup can produce 5 million small trays per annum.

      Answered on 16-03-2022 by Paul Dodd


      Most of your 2021-2022 revenue is listed in page 25 of your Information Memorandum as from "Small Meat Trays", which does not have "Current Product" in brackets alongside it as "Hospital Trays" does. Is this a mistake, or are you hoping for these sales this financial year in a product you don't yet produce?

      Posted on 13-03-2022 by Charlie

      Thank you Charlie for pointing this out. Unfortunately the years on the heading in the forecast Profit and Loss had not updated to the latest version. No changes were required to any of the numbers. The headings now align with the forecast balance sheet and cash flows. An updated IM has been loaded onto the Pledgeme site. Once again thank you for pointing this out

      Answered on 15-03-2022 by Paul Dodd


      I would love to be in a position to pledge $500 but this is way out of my reach. Is there no possibility of smaller pledges please?

      Posted on 10-03-2022 by Melanie Jeffs Gresty

      Hi . Thank you for your enquiry regarding a lower minimum pledge unfortunately at this time we are unable to look at less than the minimum of $500. Please keep in touch as this project is a game changer to produce home compostable packaging from raw materials sourced in NZ.

      Answered on 10-03-2022 by Paul Dodd


      Hi there, I really like this idea so well done. Just had a couple of questions please.
      1. It says that the potato starch (supplied by Earthpac starch ltd) is from the wasteproducts which keeps the costs down. If this takes off will there be enough starch to supply the projected production from waste products or will it need to be sourced from elsewhere at higher cost?
      2. Does Earthpac Ltd have any rights to the laminated compostable film that is supplied by Convex Plastics Hamilton or is it simply a customer? It is mentioned a few times but I am interested in knowing if this tech is part of the Earthpac Ltd business or if it is reliant on Convex plastics to supply? It says it was a game changer so I am wanting to know if the IP for the tray and film are both owned by Earthpac Ltd?
      Thank you for your time, I am quite interested.

      Posted on 10-03-2022 by Ben Kofoed

      Thank you for your interest in the project we have used the market value at the time of the forecasts for raw material costs. The production of potato starch by ESL is currently far in excess of the needs of EL for the foreseeable future.
      The laminated film for waterproofing was developed in conjunction Convex and EL has a joint patent application for the film.
      The IP for the tray is owned by EL with parents pending in NZ and Australia.

      Answered on 10-03-2022 by Paul Dodd


      I too really like the concept and I look forward to your answering Andrew's questions before I commit to investing. Thank you!

      Posted on 09-03-2022 by Dominique Leeming

      Hi, firstly really like the concept and plays into a big macro sustainability trend but a few questions:
      1. You reference the market size in NZ effectively being 250m trays but this is based on 2015 data, do you have any more recent data point? Given the consumer trend to consuming less meat I presume this number would have come down and be declining?
      2. Is the price point materially similar for your trays vs competitors recyclable trays?
      3. Are there other potential suppliers of starch other than Earthpac Starch? and how will you deal with the pricing between the two entities (other than it being fixed price annually)
      4. What is the sales/GTM strategy - do you have to get into Foodstuffs and/or Woolworths NZ for this to be viable?
      4. On the forecasts it would be good to understand these in more detail - what date is the FY end; what is the current run-rate revenue and operating costs; what volumes are assumed to be hit to achieve the revenue targets; what is the GP% in Potatopak (to provide context on if the GP% is reasonable); what costs sit in COGS; how many FTEs are there
      5. Valuation - seems steep at 72x forward EBITDA and 4.5x forward revenue. Do you have any comparable company transactions to justify the valuation

      Posted on 09-03-2022 by Andrew

      Thank you for your highly analytical questions regarding our project.
      1. The 250 million trays from 2015 data have been used to demonstrate the scale of the potential market. Current data is not available as to the volume of trays used in NZ but will have increased since 2015, due to increased population and the move by vegetable suppliers to package their products on trays for the supermarkets. The key point is that the product and its technology are not simply limited to the NZ meat tray market but much wider consumer applications.
      2. Our price is marginally greater than a high volume plastic tray but it is important to note that we do not see ourselves as solely competing on a commodity price. Rather our value in the market place reflects our unique USP. The environmental issues regarding plastic that maybe recyclable vs our home compostable tray far outweighs any marginal cost difference.
      3. Earthpac Starch Ltd (ESL) is owned 33% by Earthpac Ltd (EL) with the balance of the shareholders in ESL being shareholders in EL either directly or indirectly. The alternative supply for potato starch are overseas suppliers. This source is subject to price fluctuation and supply chain issues. The directors of ESL and EL have a commonality and are all driven by the goal of the production of the EL compostable trays using ESL starch.
      4. Our forecasts are not dependent upon Foodstuffs and Woolworths NZ for this project to be viable. EL has strong solid support from specialised food manufacturers who want an environmental USP with which to market their products. EL has had many enquiries from overseas for our trays and has entered a MoU with and Australian business to establish a franchised operation in Australia. EL is therefore not restricted to the supermarket chains in NZ to be viable.
      5. Our COGS include the usual costs that you would expect in a manufacturing business. Raw materials, labour, energy and direct manufacturing overheads. The FTE is sensitive information as the project will be automated as far as practical to ensure that up scaling of the operation will provide economies of scale to the business. The GM as shown in the forecast as provided in the IM is in excess of 54%
      6. The basis of the valuation has been agreed by the directors on a number of factors and have been stated on page 21 of the Information Memorandum. These factors are considered appropriate, given the investment in technology and as held within the patents.
      As stated we have used the 2025/26 EBITDA and a multiplier of 4 as this represents post major capital and phase 2 production revenues and in addition there is some value attached to the significant investment in R and D.
      This basis is conservative as we have not included any increased valuation in the cornerstone investment in ESL to ensure raw material supply nor any potential licencing value from the MoU with the Australian entity.

      Answered on 09-03-2022 by Paul Dodd

      Nicholas Walshe
      2022-03-10 11:56:50 +1300
      Mike Durbin
      2022-03-10 11:53:48 +1300
      Rob McCaw
      2022-03-10 11:48:40 +1300
      John Kirkland
      2022-03-10 11:48:27 +1300
      Yvonne Gilmore
      2022-03-10 11:47:48 +1300

      "Sustainable packaging is a must in the journey to become sustainable consumers."

      Graeme Fair
      2022-03-10 11:45:59 +1300
      Mary Stevens
      2022-03-10 11:41:24 +1300
      Dope Honey Limited
      2022-03-10 11:40:42 +1300
      greg ford
      2022-03-10 11:36:46 +1300
      Hugh
      2022-03-10 11:33:37 +1300
      nitin yadav
      2022-03-10 11:12:07 +1300
      [email protected]
      2022-03-10 07:57:09 +1300

      "Good luck"

      Tammy Peacock
      2022-03-09 21:04:28 +1300

      "Be good to see all supermarket meat trays replaced with compostable means! My worm farm can’t wait."

      Junming Mai
      2022-03-09 18:16:22 +1300
      Michael Lane
      2022-03-09 17:08:49 +1300
      Vicki Skill
      2022-03-09 09:13:54 +1300
      This campaign was unsuccessful and finished on 30/05/2022 at 12:00 PM.

      This campaign has closed, but this company may choose to do more equity raises on PledgeMe in the future. If you're interested in investing in Earthpac Limited, you can sign up to be notified when a new equity campaign from this company is published.

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