Camega3 has two types of customers:

• The downstream buyer of Camega3’s products.
• The independent farmers and entrepreneurs who become Camega3’s franchisees in the Camega3 system franchise.

Camega3 is solving the problem that many independent farmers lack a steady income for lack of access to quality seeds, working capital, steady offtake, or land.

The Camega3 franchise system gives these farmers access to all the production factors they lack. Both parties gain from the transaction: the farmers have a steady income, Camega3 gains productive farmers who deliver products into its system and generate positive operating cash flow.

Farmers provide their own land. Camega3 does not purchase or lease any land. With the franchise model Camega3 avoid the sensitive issue of foreign ownership of land.

The Camega3 business model is based on a franchise system: Camega3 is the franchisor and the independent farmers the franchisees. In addition, Camega3 establishes a direct sales channel that simplifies and shortens the supply chain.

Camega3 sells the right to use their business model to the franchisees in a barter trade since the farmers are cash poor. Camega3 benefits as it is able to expand its business quickly by tapping into a pool of under utilised human resources and under utilised land. The farmers also benefit by gaining access to a proven business model and a portfolio of products and services including high quality seeds, processing technology licences, working capital, domain expertise, standard operating procedures, downstream sales channels on attractive commercial terms, and a recognised brand that lifts the price premium and with it the income of the farmers.

Camega3 provides the farmer with the range of products and services in exchange for the farmer’s commitment to work within the Camega3 franchise system.

Specifically, in Camega3’s barter trade the farmers receive seeds for planting against their commitment to sell their harvest back to Camega3 at a set price if agreed quality criteria are met. The seeds remain the property of Camega3 at all times. The farmer does not have to have capital to buy them from Camega3. Giving the seeds to the farmers amounts to a non-monetary loan to the farmers. On the other hand the farmers would be ill advised to sell the harvest to a third party as that would be misappropriation of their loan and result in being cut off from the Camega3 franchise system for good and become black-listed.

However, they are free to plant and harvest their own produce on the land as long as this does not interfere with the Camega3 crop cycle. This gives them an incentive to earn additional income from agricultural knowledge they acquire from Camega3.

Camega3’s KPIs are guided by its key three objectives: empowering farmers, improving quality of the soil, creating wealth for its stakeholders.

• Number of farmers within the Camega3 franchise system
• Land area restored to health or improved
• Internal rate of return (IRR) of capital employed.

Camega3 was established in December 2018. However, the business idea and development stage rests on the founders’ decades of expertise and experience in this line of business: breeding seeds, educating farmers, controlling the supply chain, processing agricultural products using proven technologies, selling directly to wholesalers downstream in the destination countries.

As a result, Camega has a lot of traction:

• Within ten days of establishing the firm, the founders had signed an exclusive offtake agreement for North and South America, securing the sale of its entire annual production.
• Within two months of establishing the firm, the founders had acquired land rights for 2 hectares, a warehouse, set up a mother seed bank, and had planted 2 hectares.
• Within three months of establishing the firm, the founders had secured its first seed investor, giving the company a valuation of USD 5 million.

The fish based omega-3 oil market is worth around USD 2.1 billion at wholesale prices. The plant based omega-3 oil market is worth another USD 2 billion at wholesale prices. The animal feed market in ASEAN is about USD 32 billion at wholesale prices.

The total addressable market through our exclusive distributors are 1 billion consumers in North and South America, 700 million consumers in Europe, and 600 million consumers in ASEAN. Camega3 reaches 2.3 billion consumers or about 30% of the world population.

CAC: Customer acquisition cost, LTV: Lifetime Value.

Camega3 is not using these metrics as Camega3 is in the wholesale (B2B) business, not in the mass market retail business. The number of our wholesale customers can be counted on the fingers of two hands. There are no other businesses like that of Camega3. It does not spend much money on marketing. Its brand value is built

• Upstream in the farmers’ community,
• With the government as the recipient of additional tax revenue from the increases in agricultural production,
• Downstream the distribution channels with the wholesalerss and retailers.

As to Lifetime Value, Camega3 does not churn its customers. It builds long term relationship with them.

Camega3’s business model centres around its franchise system and a core product where demand oustrips supply by a wide margin and where this gap cannot be closed in all likelihood for many years.

With the price Camega3 pay to its farmers allow them to increase their income substantially, often from USD 2 per day to USD 5-10 per day or from USD 10 per day to USD 20 per day depending on the region. Camega3 on the other hand secures supply of products of defined quality, at scale and at commercially competitive prices for which it has offtake agreements far down the supply chain with wholesalers in Europe and the Americas. The margins saved by streamlining the supply chain are shared between the farmers, the consumers, and Camega3.

The unit economics are set by the gross margin, which is the difference between the revenue and the cost of goods sold, and the operating income, which includes overheads, marketing, and R&D expenses. Capex will be incurred on the balance sheet of our franchisees. The largest item on Camega3’s balance sheet is working capital to pay the farmers three times per year. The working capital is require during three months from the day the farmers are paid until the time when Camega3 gets paid by its downstream customers.

Camega3 targets very specific market segments. For its omega-3 oil and related omega-3 rich cooking oil, it sells to its exclusive distributors in ASEAN, Europe, and the Americas.

For its biopharma and cosmetics ingredients, it sells to its exclusive distributors in Europe.

Camega3 has secured offtake agreements with customers through its established relationships that have grown over decades.

At Camega3 we have identified an untapped potential as an opportunity and a demand-supply gap of a product that is essential for human health. Why wait?

The founders are passionate about the three pillars of its business model: they care about people’s welfare at the bottom of the income pyramid, they care about the planet’s scarce resources, and they care about creating wealth for all stakeholders involved.

In addition, the founders are not only passionate about these three factors, they also have the domain knowledge, the experience, and the practical skill sets to implement their business model.

We have included short biographies of our management team on our Website.

The founders know each for over 10 years and have worked together on joint projects since 2009. Some friendships within the team go back further than that still.

Camega3 has a few natural competitors. These include the large supermarket chains in developed countries that have the domain knowledge and the financial means to engage the farmers in developing countries upstream the supply chain. Competitors also include the large agribusinesses mainly consisting of the Big Four (ABCD): Archer Daniels Midland (ADM), Bunge, Cargill, and Louis-Dreyfus. Their focus is primarily on the commodity trading element of their business model, but they may change their focus once they become aware of our model.

Both groups of competitors have so far failed to empower the farmers in the way Camega3 is doing with its franchise system.

Camega3 true north are its three pillars, people, planet, profit. It cannot thrive in the long run without any of these three.

Camega3 will place the welfare of the people at the centre of its business. Camega3’s founders are fully aware that the business environment is constantly evolving and it is prepared to change and adapt to stay ahead in this evolving landscape. This includes the changes in climatic and soil conditions, as well as the impact of changes in the biodiversity on the balance of nature.

Camega3 strongly believes that the scientific approach and the power of technology and innovation will be pivotal to its success in the next ten years and beyond. Nobody can predict how rapidly the agricultural domain will evolve and in what direction. However, Camega3 will invest a substantial share of its resources to be prepared for change and to harness the power of science and technology to actively innovate its business.

The seed investor round will raise USD 1 million. This investment capital will be used for mobilisation (USD 100k), equipment purchases (USD 400k), and working capital (USD 500k) which is largely used to pay the farmers cash on delivery at the time of harvest. Beginning four to six weeks after harvest Camega3 will generate revenue from sales of its products to its customers and be cash flow positive after that.

Camega3 will not need to raise any more capital, unless it chooses to accelerate its self-funded organic growth by way of issuing debt or raising additional capital from investors, or listing its stock on a stock exchange in an Initial Public Offering (IPO).

Camega3 does not “burn” any cash until it reaches positive free cash flow. Its founders are funding their cost of living themselves and do not divert any investor funds towards living expenses. The seed investor funds are channelled into equipment purchases, working capital, and some administration, legal and licencing fees.

Camega3 will face a single cash squeeze moment during the few weeks between paying its farmers for the first time for their harvest and receiving payment from its customers. Assuming that Camega3 starts with 200 hectares and will have 29,000 hectares under cultivation 3 years later, the growth rate will be 15% MoM during the first three years.

Camega3 will be profitable after receiving payment from its customers for the products of the first harvest. This will occur within twelve months after its creation, or around December 2019.

Camega3 plans to establish operations in four key countries in ASEAN in the coming three years. The plan is ambitious but entirely within reach given the track record of its founders. The business could be built in Vietnam alone, as we have access to 10,000 hectares in each of 21 provinces across Vietnam for a total of over 200,000 hectares. However, we consider it important to spread our country risk.

We also intend to diversify our product risk by sourcing or vegetable oil from different sources. And we diversify our revenue risk by selling a wide range of products. We diversify our technology risk by deploying a wide range of technologies.

Camega3’s true innovation lies in the creation of the franchise system that captures the value of both independent farmers and unter-utilised land as a large untapped potential. The franchise system streamlines the supply chain and reduces landed cost, it is massively scalable and highly flexible, while providing full transparency and accountability to the consumer.

This value is enhanced by the agriculture-specific ERP system that holds a large data repository with benchmark data for a wide range of climatic and soil conditions and correponding sets of control measures for an optimised outcome. It also includes intellectual property of its proprietary, high yielding mother seeds.

Lastly, Camega3 has exclusive access to patented enzymatic refining technology for the production of organic, solvent-free, non-GMO, concentrated omega-3 oil.

Camega3 has an agriculture-specific Enterprise Resources Planning (ERP) system. This ERP is enhanced by a crop monitoring module that uses aerial drones to provide regular high resolution data on the state of the crops in the field. The data are fed into the crop monitoring system in near real-time and enable Camega3 to take corrective measures for an optimised yield. The ERP is running on a proprietary server with multiple backups and secure gateways to prevent hacking attacks.

To this tech stack Camega3 adds exclusive, patented enzymatic refining technology for the production of organic, solvent-free, non-GMO, concentrated omega-3 oil.

Further downstream, Camega3 operates a trading platform into which farmers can feed any other agricultural product that meets the Camega3 quality criteria and the Camega3 CSR and ethical standards.

Camega3’s key risks are changes in the government policies and regulations both in the countries where Camega3 produces as well as the countries where it sells. These changes could be initiated by corrupt elements in government that want to wield or maintain power and control or want to preserve the status quo and protect vested interests.

Other risks come from Camega3’s key competitors, large supermarket chains and the agribusinesses and commodity traders mentioned in Q17.

Other risks come from crop failure from improper application of agricultural principles, changing climate or soil conditions, or significant changes in the cost and price dynamics of agricultural products from shifts in the geopolitical or economic landscape that offset the demand-supply balance.

Large supermarket chains and the big four agribusinesses mentioned in Q17 are Camega3’s natural acquirers of this business. Other natural acquirers are cooperatives in the producing countries that want to take control of the supply chain once a new, streamlined and more direct supply chain stack has been established by Camega3.

Camega3 has raised USD 100,000 so far and invested an additional USD 100,000 in its infrastructure and payroll. The company has secured three angel investors who hold 1.5% in the company for a cash injection of USD 75,000. The start-up was financed out of the private purses of the founders.

Family and friends, and established business contacts out of the founders’ business networks.

Camega3 is raising USD 1 million for a 20% shareholding in the company. Two anchor investors will contribute USD 250,000 each for a total of USD 500,000. Another 18 investors will contribute USD 25,000 each for a total of another USD 500,000.