Executive Summary
Overview
The goal of Conservation and Alternative Energy Research, Inc. (CAER, Inc,) is to research new
systems for the conservation of our natural resources and research sources of renewable energy. Our
newest initiative is the Sacramento Biofuels Project. The Sacramento Biofuels Project will divert
approximately 30,000 tons of biomass away from the local landfills and bring it to a processing plant
scheduled for the separation and processing of the biomass into more than 200,000 gallons of
Biodiesel, 20,000 tons of Vermi-compost, 7,000 tons of high protein cattle feed and 4,000 gallons of
glycerin for the soap industry. CAER, Inc. has identified several processes to expand this project into
the future to provide sustainable and long term Biodiesel production. Through implementation of this
project CAER, Inc. will successfully recycle a significant volume of biomass once occupying landfill
space, therefore extending the life of the landfill, and provide Sacramento’s commercial and
residential market diesel alternative at a competitive price.
Problem
Most biofuel processing plants utilize restaurant waste cook oil, soybean oil, or algae based oil. These
processes can be limited, or too expensive due to the chemical composition of the oil and
inconsistency of the oil. Cooking oil for instance, can be over cooked and difficult to process in
addition the cooking oil may contain animal fats, or other contaminants that require further filtering
to process the oil. Chemically processing the cooking oil requires titration of each batch and the use
of large volumes of chemical reactants to separate the esters in the oil thus making it very costly to
process. The alternative is using clean or virgin oil like soybean oil. This reduces the need to titrate
each batch to process but there is a significant impact and competition with the food industry. This
can cause the cost of the getting the soybean oil to crush to be very high. Algae farming and
processing into biofuel is also very costly due to the difficulty harvesting algae and processing into
oil as well as a low oil yield.
Solution
CAER, Inc. has identified an untouched, clean and consistent source of Biomass that can be
processed into oil. The oil derived is chemically consistent for processing and a stable source of oil
for the production of Biodiesel. With this virgin source of oil the processing cost is predictable, thus
keeping the costs low ensuring a competitive Biodiesel price point. CAER, Inc. is also diverting
30,000 tons of biomass away from the landfill. This biomass is a free resource to our project. CAER,
Inc. has also created an expansion program that will allow fallow land to be reclaimed for the
production of a nonfood baring seed plant. Oil from this seed can be used to allow a further break of
the dependency on petroleum. CAER, Inc. will use a seed barring plant that has high oil yield but no
impact on the food competition thus solving the issue of impacting the food industry.
Executive Summary – Conservation & Alternative Energy Research
Opportunity
Biofuel is an emerging market that continues to grow as public awareness demands alternate fuel for
the commercial and residential market. The Biodiesel Association, Federal, and State Governments
have set goals for building this market up to over 1.1 billion gallons of Biodiesel per year by 2015.
Currently California produces approximately 427 million gallon per year. A detailed study can be
referenced in the “Advanced Biofuel Market Report 2011 Meeting the California LCFS” by E2
Environmental Entrepreneurs.
In Sacramento there is a great deal of interest in the biodiesel market, beginning as a grass roots
movement, and now growing on a commercial scale. The Biofuels Network in Sacramento has gained
a significant foothold. Originally the Biofuels Network was a grass roots movement, but has since
become an organized Biodiesel outlet in the Sacramento area. CAER has worked with the Biofuels
Network in Sacramento to align with our Sacramento Biodiesel Project as a supplier to their clientele.
With the push by State, and Federal agencies to bring this biofuels production up to 1.1 billion
gallons by 2015, CAER is positioned to be one of the major players in the market. CAER will have
the ability to reproduce this business model in other markets throughout California, and the United
States. CAER’s projections on biodiesel production, places CAER at over 1 million gallons of
biodiesel by the year 2015, in just the Sacramento Market.
Competitive Advantages
CAER’s competitive advantage in this project is has several interesting aspects.

CAER’s approach is one of sustainability. Other refineries and process are simply purchasing
waste oil or virgin soy oil. The collection of waste oil from the local market is highly
competitive and expensive. The same can be said for the purchase of virgin soy oil that must
be trucked from out of state sources. CAER is recycling the waste currently being dumped in
the landfill and processing this into biodiesel. Using a wasted resource allows CAER to cut
Biodiesel processing costs significantly. CAER can also produce a chemically consistent
product thus allowing a price per gallon advantage in the market. Everything is 100%
recycled.

The Sacramento Biofuels Project has more than just one product. We will produce high
protein meal for the cattle industry, vermi-compost for the farming community, glycerin for
the soap industry, and biodiesel for commercial and residential use. Effectively reaching a
variety of markets and profit potentials.

CAER is focused on a message of conservation and sustainability. CAER has the interests and
backing of the general public’s need for completely green companies and processes. This
gives CAER a platform to gain media attention, and public support for our cause and future
projects.
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Executive Summary – Conservation & Alternative Energy Research
Business Model
The Sacramento Biodiesel Project derives its revenue from two distinct processes which cumulatively
total approximately $2,215,000 in revenue for the first year.

The first process is the separation of seeds from the biomass. The separated seeds will be
converted it into Biodiesel, which has an estimated value of approximately $700,000 for the
first year. Crushing the seed also produces approximately 7,000 tons of seed meal that is used
as cattle feed with an approximate value of $730,000 for the first year. The byproduct of
Biodiesel refining is glycerin. The leftover glycerin has an approximate market value of
$35,000 for the first year.
 The second process is the vermicomposting of the leftover biomass after sifting. The
vermicompost will be sold to the local farming community as high-end soil amendment to
improve crop yields and strengthening plants. The vermicompost has an estimated value of
$750,000 for the first year.
Team

Richard E. Waldo, CEO: Richard’s experience in business and media consulting began in the
1990 working in the electronics industry as a business solutions manager as well as working in
media sales and marketing. Since attending Humboldt State University for Engineering and
Physics he has desired to create an energy research company.

Kathleen A. Waldo, VP/Secretary: Kathleen has over 15 years experience working as an
environmental consultant in the investigation and remediation of leaking underground storage
tanks. She has also owned and operated a profitable vermicomposting business in the
Sacramento area since November 2009.

Mary G. Burns, CFO: Mary owned her own successful business for over 20 years before
selling the business for a significant profit. She has continued to grow her business and book
keeping skills through continuing education and providing treasury services to local
organizations.

Don Moe, Compost Manager: Don owned and operated his own successful landscaping
business for over 25 years. He has extensive training and hands on experience in the
composting of many different types of organic materials as well as extensive knowledge of the
uses and benefits of compost.

Matt Farris, Biofuels Manager: Matt has worked for over 8 years as a registered geologist in
the environmental industry. He has many years experience as construction oversight as well
as point of contact for health and safety operations. In addition to his vast technical
knowledge he has a passion for compost and ‘green operations.’
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Executive Summary – Conservation & Alternative Energy Research
Financials

Fixed Costs:

Variable Costs:

Biofuel Market Growth: Currently California produces approximately 427 million gallon a
year of Biofuels. Federal and State regulatory goals are to have the State’s Biofuel production
up to over 1 billion gallons a year by the year 2015. CAER’s goal is to be one of the leading
innovators in sustainable Biofuels production.

Projected Break Even: CAER projects that after 12 months of processing Biofuels, composting
biomass and the sales of the related products the business will reach a breakeven point

Projected Positive Cash Flow: CAER projects that the Sacramento Biofuels project will gain a
positive cash flow following the second wine crushing season.

Overall Profit Potential: The projected annual revenue for the Sacramento Biofuels project is
approximately $2.2 million dollars per year in overall sales. After first year of start up
expenses the first year actual profit potential is estimate to be approximately $500 thousand
dollars.
Funding Required
CAER, Inc. is currently seeking 1.7 million dollars to fund the Sacramento Biodiesel Project. These
funds will be used to finance the acquisition of real estate, equipment and the development and
infrastructure to implement the business model. CAER is currently working to secure permits,
arrange service agreements and identify appropriate operating space. It is estimated that with funding
by April 2012 CAER will be able to close escrow on the processing plant, begin construction of
facilities and finalalize equipment purchases. At the conclusion of these activities CAER will ready to
receive shipments of biomass by mid August 2012.
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