AQUAGOLD International, Inc.
This Business Plan does not constitute an offer to sell to, or a solicitation of an offer to buy from, nor shall any of the securities be offered or sold to, any person in any state or other jurisdiction in which such offer, purchase, or sale is unlawful or unauthorized under the securities law of such jurisdiction. AQUAGOLD reserves the absolute right to select the investor(s) to whom securities will be sold.
This Business Plan includes certain statements provided by AQUAGOLD with respect to the anticipated future performance of AQUAGOLD. Such forward-looking statements and estimates reflect various assumptions that may or may not prove to be correct. Forward-looking statements typically are identified by the use of such terms as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate”, “plan”, and similar words. No representations are made as to the accuracy of the statements, estimates, or assumptions, which are subject to change at any time.
While some of the information contained herein is from sources deemed reliable, AQUAGOLD has not independently verified it. AQUAGOLD makes no warranties, expressed or implied that actual results of the product(s) will conform to results projected herein. This document is subject to revision, withdrawal, or modification at any time.
TABLE OF CONTENTS
I COMPANY P. 1
1.1 Background and Executive Summary
1.3 Mission and Vision
1.4 Capitalization and Recent Stock Price
1.5 Management Team
II MARKET P. 4
Aquagold Superface 2009
China Bottled Water Market Characteristics
Other Pending Initiatives
III NEW DEVELOPMENTS P. 6
3.1 Apple Ice Wine
3.2 Financial Mobile transactions and telephony
IV ACTUAL PREOCCUPATIONS OF MANAGEMENT P. 7
V PARTNERSHIPS P.7
5.1 Import – Export Deal
5.2 Debenture; Promoteurs Associés/Groupe CLAN
5.3 Broadcast Paycheck
5.5 Application VelocityMoney
5.6 Application Sign Mobile
5.7 Application Broadcast
5.8 Application Hybrid
1.1 Background and Executive Summary
AQUAGOLD International, Inc. (“AQUAGOLD” or the “Company”) began as a global producer and distributor of premier Canadian spring water. AQUAGOLD has taken over where Iroquois Water had left, continuing a long tradition of exploiting spring water sources on their native territory.
The Company began studying the Asian and Chinese bottled water markets in 2005. It has been undertaking extensive relationship building and business development efforts in China since 2007. Management believed that it was well positioned to benefit from the forecasted growth exceeding 20% in its product category in China for the next several years, as well as the healthy forecasted growth rates in Japan and other significant global markets that it will address as it solidifies its base of business in China.
Aquagold chose China as its first export market, where it has begun shipping its flagship 500 mL bottled water product. The first order for five 40’ containers (216,000 bottles) of flagship product arrived in China in 2008, part of which was on premium shelf space at Lianhua, one of the two top supermarkets in China with over 4,000 stores and growing by approximately 400 stores annually. AQUAGOLD is the beneficiary of an irrevocable letter of credit for this order, and will continue to be so for all orders under existing contracts.
The Company had signed two distribution contracts totaling CAD$200 million over seven years with two distributors in different and significant sectors of the market in China. Gross margin on the first five containers is approximately 20%, but Management expected this to rapidly improve to over 30% due to price decreases expected from vendors based on economies of scale. The Company has high operating leverage because of low fixed expenses. It desires to invest more in initial marketing and advertising expenses in order to more quickly broaden its branding and marketing campaign. Management believes this initial increased investment will realize more revenue and profit quicker in the very large and rapidly growing Chinese market.
The Company, through its distributors, has tied up with the two largest supermarket chains in China for off-trade sales, and with a well-connected distributor of premier consumables in the on-trade segment. AQUAGOLD is initially launching in the major urban areas of Shanghai, Beijing, Nanjing and Dalian and plans to rapidly expand sales throughout greater China thereafter. AQUAGOLD plans to build upon its expected success in China by expanding distribution to other international markets. Management believes that AQUAGOLD water is of the highest quality in the world, and the Company plans to develop its name into an international brand for quality in the premium bottled water markets.
AQUAGOLD had signed a co-packaging agreement with a high quality bottler in Montreal successfully produced the Company’s first order, but the Company needs a better source of water in order to reach a selling price that would satisfy our partners in China.
In 2010, AQUAGOLD revised its professional management team to actualize its global vision, to manage and grow its business in a professional way. Management believes that the composite team of original entrepreneurs and new managers will deploy all the requisite skills, experience and know-how to operate the Company profitably and effectively for its shareholders and stakeholders.
AQUAGOLD International was originally established as a private company in Montreal, Canada in July 2006. This federally incorporated, private Canadian company changed its name to AQUAGOLD Canada and became a wholly owned subsidiary of the existing AQUAGOLD International, Inc. of the US. The Company is listed on the OTC/Pinksheets as the result of a reverse merger of AQUAGOLD USA into a publicly traded shell and a name change, filed in January and February 2008, respectively. AQUAGOLD International, Inc. is registered in the state of Nevada and trades under the ticker symbol AQUI.
The original Company was co-founded by four entrepreneurs – three native Canadians and one Chinese national Canadian who resides in Shanghai. They have funded the Company with over US$3 million in cash to date. The Company has recently hired a professional management team to help actualize its vision. It utilizes offices in Montreal, Canada; Connecticut, USA; New York, NY; Atlanta, GA and Shanghai, China.
AQUAGOLD has maintained a strong, socially responsible presence in China since it began in the market in 2007. The Company received the 2008 China International Cultural Communication Center Compassion award at the Great Hall of the People in Beijing. The Company has made annual charitable contributions to the country, that have helped build and maintain educational facilities and support efforts to aid victims of the recent earthquake that led to so much destruction and displacement among citizens in China that year.
1.3 Mission and Vision
The Company’s mission is to provide premier Canadian spring water products to the world and also to operate in fields that would yield a fair profit to the Company and its investors. New Management has an open mind to look into new fields that rely on the competence of its related partners and to operate globally as it has possibilities to implement futuristic technologies worldwide. Its mission and vision have begun in China, where it has cultivated strong local relationships, and it plans to replicate its expected success in other parts of the world.
1.4 Capitalization and Recent Stock Price
As of February 28th, 2014, the Company had 8,000,000,000 authorized shares, of which 1,143,343,671 shares were issued and outstanding, and further of which 603,728,498 were freely traded and commonly referred to as ‘float’. As of close of the market on February 28th, 2014, the estimated market cap according to Pinksheets.com was US$ 800,341 on a closing price of US$0.0007 per share.
1.5 Management Team
Dr Paul A. Taillefer – Co-Founder, President and Chairman of the Board
Dr. Taillefer, president and CEO of AQUAGOLD Canada, has been appointed President and Chairman of the Board of AQUAGOLD International in 2010. Dr. Taillefer has been associated with the Company as a co-founder, a major investor, and served on the Board for a six-month assignment as president of the Audit Committee two years ago. He is intimately familiar with the markets, operations, and personnel of the Company, and will bring his considerable leadership and commercial experience to the Company as it looks forward to what it believes to be a very exciting next years.
Dr. Taillefer has a strong leadership and management experience from a young age. He held his first Director position at the age of 23, on the Board of the insurance company with which he was affiliated when he was president of both his faculty and the Canadian Medical Students and Interns (CAMSI) organization. He has served on a number of Boards of other companies since and has owned and operated factories, shopping centers, hospitals and housing projects. Therefore Dr. Taillefer has direct experience in production, which will be the core competency of AQUAGOLD in Canada as it seeks to fill orders for the numerous contracts of bottled water abroad.
Furthermore Dr Taillefer has been interested in water as long as he can remember: the family had a spring water source on the property in the village where he was born. Later as a graduate student in Europe, he experienced firsthand the craze of their citizens for the healing quality of water after visiting such places as Aix-les-bains, Evian-les-bains, Bath in the county of Somerset etc.
When he took over the operations in 2010, Dr Taillefer came to the conclusion that the previous Management was too limited in its scope, could not achieve their goal in the water business and should look into different fields and venues. But before doing this the Company had to “clean its act” and that is what it has done so far.
Gilles ST-Pierre – CFO, Vice President Development and Marketing
Mr. St-Pierre has had a long career in the banking industry mostly with Scotia Bank as Customer services analyst, Branch Manager and Director of Commercial Banking Services. He has proven himself as an influential leader, a solution focused, results driven person and a powerful bilingual communicator. He will bring his broad experience to the company as we propose to expand considerably in the near future.
His numerous contacts both in Asia and in the Middle-East will allow the Company to open new markets in those areas. Mr. St-Pierre will be given more and more responsibility in the Company as he familiarizes himself with its operations.
Pierre Taillefer - CEO
Pierre Taillefer, son of the Chairman, has been cooperating with the company since its onset. He has a long and varied business experience both nationally and internationally. An airline pilot by profession with a strong business education, he has run an airline company in Africa for many years until he moved to China, sent there by Air Canada to be an instructor on the Airbus for Chinese and foreign pilots in their fast expanding market. He has been in charge of all expedition and freight services for AQUAGOLD from the beginning. Now that he is stationed in China he has numerous business contacts opportunity and will apply himself to develop our Asian market in the south of China replacing our own York Tang. He has developed a huge network of business contacts and is contributing largely to revamp the company and orient it towards more profitable fields.
China is the largest market in the Asia-Pacific region for bottled water, and Datamonitor forecasts this market to continue to grow at a compounded annual rate of over 20% through 2012 (Dec 2008 Datamonitor). China is developing an emerging middle to upper class population. These new class segments have rapidly developed an appetite for products with premium brands.
Although AQUAGOLD water is being offered as a premier brand, and the Company has taken a highly disciplined approach to packaging and presentation in order to establish and maintain the brand as such. The Company is still operating in that direction but , under the new Management, decided to look also into different fields that are available in China and worldwide with a much better promise of success.
2.2 “AQUAGOLD Superface 2009”
In 2009 the company has Company has launched a national marketing and advertising initiative in the form of a TV show that carries the AQUAGOLD name and brand weekly to a large and growing audience in China. York Tang, co-founder and member of the Board of Directors of AQUAGOLD, created this opportunity via his strong relationship with the China International Cultural Communication Center (CICCC). The CICCC recently began collaborating with the Jilin Television Network in order to develop a show that would allow young Chinese women to express themselves in a creative environment.
The goal of the contest was to find the “Face” of AQUAGOLD in China, and the winner of the annual competition to be crowned Miss AQUAGOLD Superface 2009.
The show has been a sound success with viewership larger than thirty million people weekly. Current relationships continue to be solidified due to the success of the show while new key relationships have been formed through recent Superface events.
The finale of AQUAGOLD Superface was televised in Beijing, the winner of the Beijing area was announced and a gala dinner event was held afterwards.
2.3 China Bottled Water Market Characteristics
Forces analyzed yielded the following results for incumbents:
There is a strong threat from substitutes due to low switching costs and cheap, beneficial alternatives;
There is a moderate degree of rivalry overall among players due to various factors including ease of expansion, similarity of players, differentiated product parameters, and others;
There is strong supplier power, particularly in the Spring Water category; and
There is moderate buyer power predominantly due to buyer independence, price sensitivity and financial muscle. (Dec 2008 Datamonitor)
The majority of existing competitors in the Asia-Pacific region each hold less than 5% market share. Only four companies hold market share positions greater than 5%, led by Groupe DANONE, the owner of the Evian brand.
2.4 Other Pending Initiatives
The Company has been in substantive negotiations with three high profile organizations in China for three different and significant venues of marketing exposure for AQUAGOLD. Management expects that successful conclusion of agreements will lead not only to sales of its product, but more important, will provide local, national, and international exposure to its name and premier brand in association with prominent organizations in each case.
AQUAGOLD signed a partnership agreement in September 2009 with the DEVNET agency of the United Nations for the company’s products to be featured in the DEVNET section of the United Nations Pavilion at the Shanghai World Expo 2010. The agreement was signed by AQUAGOLD’S CEO, Domingo M. Silvas III, General Representative of the Pavilion GAO Quoqiang, Executive Director of the Pavilion Li Shien and Participants Service Center Deputy Director, Bureau of Shanghai World Expo Coordination Richard Zou. A dinner ceremony was attended by all to celebrate the event and was also attended by the Vice Chairman and Vice President of Wolong Holdings, the owner of Tieato, an AQUAGOLD third party distributor, and several representatives from the Arts and Culture Circles of China. ILL have a pavilion at the expo site which covers a 5.3km area. The company paid a large amount of money only to find that its Management had been led astray and that Coca-Cola had the right to all of the water distribution at Expo 2010.
3. NEW DEVELOPMENTS
The Company changed its Management in 2010 and is in the process of developing new fields of operation:
3.1 Apple Ice Wine
One of the new fields that Management is looking into is the export of Apple Ice Wine from Canada.
Shanghai Tieato Trading Co., Ltd. is a distributor of premier wines to luxury hotels, top-class restaurants, and prestigious nightlife establishments that are an important part of Chinese social life, particularly in larger cities. With over ten years of trading experience, it maintains strong relations with well-known vineyards and companies in France and Chile. Tieato distributes high-class, well-known brands of red and white wine, as well as various finely designed gift boxes throughout greater China. Its professional sales and marketing staff come with years of experience from large, international wine companies. Tieato maintains a network of regional agents as part of its advanced marketing operations, as well as an in-house and outsourced integrated logistics system for supply operations in China. Tieato is affiliated with the Shanghai BETTERLIFE Magazine, the Shanghai Meno Advertising Co., Ltd., and the Shangai Meihua Expo Services Co., Ltd
3.2 Financial Mobile Transactions and Telephony
Aquagold is also, as mentioned before, looking into the financial mobile transaction business and global telephony with the cooperation of its new partners. The negotiations are in the final stage of implementation and in signing new agreements that we will be able to announce shortly.
One of the companies that we are approaching is Wolong Holding Group, a Chinese company with which we have solid ties from years back.
Wolong Holding Group was established in 1984 and primarily engages in four lines of business – manufacturing, real estate, international trading of goods, and financial investment. The group comprises four main operating subsidiaries, two of which are publicly traded on the Shanghai stock exchange as Wolong Real Estate Group (SH600173) and Wolong Electric Group (SH600580). The other two are Wolong International Business Co., Ltd., which in turn holds Shanghai Wolong International Business Co., Ltd., and Wolong Finance & Investment. The group comprises a total of more than 25 subsidiaries and affiliated companies, and its trademark is deemed one of the most recognized in China by the National Industrial and Commercial Bureau. Leading products enjoy up to 20% market share, and its trading and financial arms operate business networks in more than 30 countries worldwide. Wolong has built customer and strategic long-term, cooperative relationships with a number of industry leading and fortune 500 companies including Emerson, Bosch, LG, Panasonic, Hitachi, Mitsubishi, Sharp, Huawei, China Telecom and Carrier.
4. ACTUAL PREOCCUPATION OF MANAGEMENT:
In order to achieve its goals and enter into partnership with the groups that management is dealing with actually, the main request has been to reorganize the company’s financials and share situation to make it more attractive. Management is considering transforming the debt into shares and warrants and – mostly – Management thinks that it should do a reverse split to increase the value of the common shares and to bring it to a more suitable level.
Once this is achieved, the partners will sign agreements with the company and allow it to prosper at a rate that will reward our efforts of the last three years.
5.1 Import-Export Company:
One of the first steps to be taken after the reverse split is a partnership with Control Tower Holdings of Hong Kong. That company has – among other things - a 5% holding in a Chinese Import – Export Company. At this time the Management is estimating its value in order to finalize the deal.
5.2 Following this, Management will endeavor to get a debenture of 2 million dollars payable in shares and warrants with Promoteurs Associes/ Groupe CLAN
Step 3 will be to sell the Broadcast Paycheck License rights for China, South Africa and others;
Management will offer the VelocityMoney platform to many countries including Asia and Africa.
5.5 Application for VelocityMoney:
The next step will be to sell the Generosity, an application customers for VelocityMoney to all those who would require it for their business
5.6 Application Sign by Mobile
A further step will be to offer the “sign by Mobile” application for those who have to sign contracts and do not want to go on site; for instance a contract that needs to be signed in Ghana by a Chinese company would not require the signatories to go there but allow them to sing it in their office and have the same legal tender.
5.7 Application Broadcast Products
Promotion of the Broadcast application in the countries to which the other systems have sold
5.8 Application Hybrid POS
Finally Management will Implement Hybrid Paytech World with all the clients that have the previous systems.