Return-Path: Received: from server.64xmedia.com by server.64xmedia.com with LMTP id px40CjG6QWSRUgAAdUq3JA (envelope-from ); Thu, 20 Apr 2023 18:18:25 -0400 Return-path: Envelope-to: bchen@aicenergycorp.com, directory@aicenergycorp.com, fchen@aicenergycorp.com, jlee@aicenergycorp.com, Smelk@aicenergycorp.com Delivery-date: Thu, 20 Apr 2023 18:18:25 -0400 Received: from wsip-72-211-63-13.lv.lv.cox.net ([72.211.63.13]:59974 helo=DESKTOPK3JB9CK) by server.64xmedia.com with esmtpsa (TLS1.2) tls TLS_ECDHE_RSA_WITH_AES_256_GCM_SHA384 (Exim 4.96) (envelope-from ) id 1ppcbh-0005Uh-09; Thu, 20 Apr 2023 18:18:25 -0400 From: To: "'Jim Pappalardo'" Cc: "'John Melk'" , , , , "'John Lee'" , References: In-Reply-To: Subject: RE: Brought Capital questions in advance of term sheet Date: Thu, 20 Apr 2023 15:18:23 -0700 Message-ID: <013101d973d6$06208390$12618ab0$@aicenergycorp.com> MIME-Version: 1.0 Content-Type: multipart/alternative; boundary="----=_NextPart_000_0132_01D9739B.59C3F580" X-Mailer: Microsoft Outlook 16.0 Thread-Index: AQHnoWkuntBr4BAjEYHV9b38VveROgJ/6NAbrwRpElA= Content-Language: en-us This is a multipart message in MIME format. ------=_NextPart_000_0132_01D9739B.59C3F580 Content-Type: text/plain; charset="us-ascii" Content-Transfer-Encoding: 7bit Hi Jim, The answers to your questions are below in PURPLE. Sincerely, Phillip Stack From: Jim Pappalardo Sent: Thursday, April 20, 2023 8:06 AM To: John Melk Cc: Jennifer Wilson ; JOHN D. LEE Attorney ; Phillip Stack ; ASIAN BANKER BOB CHEN 23203 Charwood. Place ; Snow Liu-Melk @AIC Subject: RE: Brought Capital questions in advance of term sheet A few more questions from BCG herein. On the Finance items we can just share the most up to date model. Could you please send that along for convenience? Project Sponsor: AIC Energy Inc ? address and contact details AIC Energy Corp 2830 S. Jones Blvd., Suite 2 Las Vegas, NV 89146 directory@aicenergycorp.com Project borrower: SAFuels X? (contact information same as AIC, physical address below) SAFuels X 14848 42nd Street NW Williston, ND 58801 Contingency in capex? About $20M in the ask of $455M FINANCE Annual sales revenue About $825M annual (includes incentives) OPEX About $625M annual EBITDA - range or 10 year average About $200M annual (includes incentives) Estimated project value on stabilization / 2 year operation? TIC: $455M / Est. Net Profit (2 years): $180M Which equates to: 2.53 Loan repayment period? 20 years for USDA portion if used Outcome - refinance/sale? Refinancing of loan would depend on lead lender's terms for USDA portion From: Jim Pappalardo Sent: Thursday, April 20, 2023 10:41 AM To: John Melk > Cc: Jennifer Wilson >; JOHN D. LEE Attorney >; Phillip Stack >; ASIAN BANKER BOB CHEN 23203 Charwood. Place >; Snow Liu-Melk @AIC > Subject: Brought Capital questions in advance of term sheet John- My contact at Broughton Capital in London, who AIC has spoken with, is interested in putting forth terms for ND. That said, below are some questions they have asked which I would appreciate AIC's response on each. Please pass along supporting material where relevant, i.e., costs . Can I ask some questions and clarifications about this project before I put together proposed terms? As I understand the sponsor has spent $30m to date About $20M has been spent to date AIC are now seeking $455m? As debt plus equity? Can be debt, equity or both. AIC is seeking $455M as a combination of both debt and equity. As part of the $455M, $250M can be from a lead bank using the USDA 9003 loan guarantee. However, the USDA/lead bank portion can be replaced by a different investor if they desire to do the entire amount. Not included in the $455M is working capital, which will need to be funded around start up. Any further funds from the sponsor? Sponsor plans to supply the soft costs (HQ, legal, accounting). So the total project cost is $485m? Spent to Date: $20M TIC: $455M (with about $20M for contingency) Working Capital Estimate: $40-50M Total: $515-525M with Working Capital $30m spent includes land purchase for the site - 87 acres in N Dakota $20M spent includes land Can you give me a breakdown for the costs? Land, Easements, and Permits $7M spent / $1M to be spent Hard construction costs $10M spent / $432M to be spent / $20M contingency Soft costs $3M spent / $2M to be spent What stage is the project at? item 14 milestones lists those planning items achieved to date. Any more achieved? Project is at the end of FEL-3 start of detail design. All major permits have been received. What further design and technical work to be completed before 'shovel-ready' status?? Project will need about 2-3 months of detail design before fabrication of long-lead items can be started. Feedstock and offtake are subject to market forces but mitigation with the location of the plant for feedstock and 'beneficial' premium because the fuel is more sustainable will impact for many years? Can this be firmed up with long term contracts? Feedstock will have a long-term contract finalized shortly. The primary offtake market will be the DoD which will adjust to market forces. Regards, Jim Pappalardo Vice President Investment Banking GSS Capital 877-477-7862 x 2023 732-299-1006 (mobile) GSS Capital Group is the Investment Banking/Corporate Finance Dept. of Garden State Securities, Inc. Garden State Securities does not generally accept buy, sell or cancel orders by e-mail, and does not accept any instructions by e-mail that would require your signature. Information contained in this communication is not considered an official record of your account and does not supersede normal trade confirmations or statements. Any information provided has been prepared from sources believed to be reliable but is not guaranteed, does not represent all available data necessary for making investment decisions and is for informational purposes only. Information received by or sent from this system is subject to review by supervisory personnel, is retained and may be produced to regulatory authorities or others with a legal right to the information. Confidentiality Notice This e-mail message is intended only for the use of the designated recipient. If you are not the intended recipient, please do not disseminate, distribute or copy this communication. Please notify the sender immediately by return e-mail and then delete and discard all copies from your system. E-mail cannot be guaranteed to be secure, error-free or free from viruses. Garden State Securities, therefore, does not represent that this message is accurate or timely and it may not be relied upon as such. This e-mail may be privileged and/or confidential, and the sender does not waive any related rights and obligations. Any distribution, use, or copying of this e-mail or the information it contains by other than an intended recipient is unauthorized. If you receive this e-mail in error, please advise me immediately (by return e-mail or otherwise). Unless specified by the sender, e-mail messages are not encrypted. As such, sensitive information sent to or received from this e-mail address may not be secure. Information received by or sent from this system is subject to review by supervisory personnel, is retained, and may be produced to regulatory authorities or others with a legal right to the information. Garden State Securities, Inc. Member FINRA/SIPC This e-mail may be privileged and/or confidential, and the sender does not waive any related rights and obligations. Any distribution, use, or copying of this e-mail or the information it contains by other than an intended recipient is unauthorized. If you receive this e-mail in error, please advise me immediately (by return e-mail or otherwise). Unless specified by the sender, e-mail messages are not encrypted. As such, sensitive information sent to or received from this e-mail address may not be secure. Information received by or sent from this system is subject to review by supervisory personnel, is retained, and may be produced to regulatory authorities or others with a legal right to the information. Garden State Securities, Inc. Member FINRA/SIPC ------=_NextPart_000_0132_01D9739B.59C3F580 Content-Type: text/html; charset="us-ascii" Content-Transfer-Encoding: quoted-printable

Hi Jim,

 

The answers = to your questions are below in PURPLE.

 

Sincerely,

Phillip = Stack

 

From: Jim Pappalardo <jp@gsscapital.com> =
Sent: Thursday, April 20, 2023 8:06 AM
To: John = Melk <jmelk06@icloud.com>
Cc: Jennifer Wilson = <jwilson@aicenergycorp.com>; JOHN D. LEE Attorney = <jlee@johndleelaw.com>; Phillip Stack = <pstack@aicenergycorp.com>; ASIAN BANKER BOB CHEN 23203 Charwood. = Place <bobsichen@yahoo.com>; Snow Liu-Melk @AIC = <smelk@aicenergycorp.com>
Subject: RE: Brought Capital = questions in advance of term sheet

 

A few more = questions from BCG herein. On the Finance items we can just share = the most up to date model. Could you please send that along for = convenience?

 

Project Sponsor:   AIC Energy Inc ? address and = contact details

AIC Energy = Corp

2830 S. Jones Blvd., Suite = 2

Las Vegas, NV = 89146

directory@aicenergycorp.com

 

Project borrower:  SAFuels X? (contact information same as AIC, physical address = below)

SAFuels = X

14848 42nd Street = NW

Williston, ND = 58801

 

Contingency in capex?

About $20M in the ask of = $455M

 

FINANCE
Annual sales revenue

About $825M annual (includes = incentives)

OPEX

About $625M = annual

EBITDA - range or 10 year average

About $200M annual (includes = incentives)

Estimated project value on stabilization / 2 year = operation?

TIC: $455M / Est. Net Profit = (2 years): $180M

Which equates to: = 2.53

Loan repayment period?

20 = years for USDA portion if used

Outcome - refinance/sale?

Refinancing of loan would = depend on lead lender’s terms for USDA = portion

 

 

From: Jim Pappalardo
Sent: Thursday, = April 20, 2023 10:41 AM
To: John Melk <jmelk06@icloud.com>
Cc: Jennifer Wilson <jwilson@aicenergycorp.com&g= t;; JOHN D. LEE Attorney <jlee@johndleelaw.com>; = Phillip Stack <pstack@aicenergycorp.com>= ; ASIAN BANKER BOB CHEN 23203 Charwood. Place <bobsichen@yahoo.com>; Snow = Liu-Melk @AIC <smelk@aicenergycorp.com>Subject: Brought Capital questions in advance of term sheet =

 

John- My = contact at Broughton Capital in London, who AIC has spoken with, is = interested in putting forth terms for ND. That said, below are some = questions they have asked which I would appreciate AIC’s response = on each. Please pass along supporting material where relevant, i.e., = costs .

 

Can I ask some questions and clarifications about this = project before I put together proposed terms?

 

As I understand the sponsor has spent $30m to = date

About $20M has been spent to = date

 

AIC are now seeking $455m?  As debt plus equity? = Can be debt, equity or both.

AIC is seeking $455M as a = combination of both debt and equity.  As part of the $455M, $250M = can be from a lead bank using the USDA 9003 loan guarantee.  = However, the USDA/lead bank portion can be replaced by a different = investor if they desire to do the entire amount.  Not included in = the $455M is working capital, which will need to be funded around start = up.

 

Any further funds from the sponsor?

Sponsor plans to supply the = soft costs (HQ, legal, accounting).

 

So the total project cost is = $485m? 

Spent to Date: = $20M

TIC: $455M (with about $20M = for contingency)

Working Capital Estimate: = $40-50M

Total: $515-525M with Working = Capital

 

$30m spent includes land purchase for the site - 87 acres = in N Dakota

$20M spent includes = land

 

Can you give me a breakdown for the = costs?

Land, Easements, and Permits

$7M spent / $1M to be = spent

Hard construction costs

$10M spent / $432M to be = spent / $20M contingency

Soft costs

$3M spent / $2M to be = spent

 

What stage is the project at? item 14 milestones lists = those planning items achieved to date. Any more = achieved?

Project is at the end of = FEL-3 start of detail design.  All major permits have been = received.

 

What further design and technical work to be = completed before 'shovel-ready' status?? 

Project will need about 2-3 = months of detail design before fabrication of long-lead items can be = started.

 

Feedstock and offtake are subject to market forces = but mitigation with the location of the plant for feedstock and = 'beneficial' premium because the fuel is more sustainable will impact = for many years? Can this be firmed up with long term = contracts?

Feedstock will have a = long-term contract finalized shortly.  The primary offtake market = will be the DoD which will adjust to market = forces.

 

 

Regards,

 

Jim Pappalardo

Vice President

Investment = Banking

GSS Capital

877-477-7862 x = 2023

732-299-1006 = (mobile)

 

GSS Capital Group is the Investment = Banking/Corporate Finance Dept. of Garden State Securities, = Inc.

Garden State Securities does not = generally accept buy, sell or cancel orders by e-mail, and does not = accept any instructions by e-mail that would require your signature. = Information contained in this communication is not considered an = official record of your account and does not supersede normal trade = confirmations or statements. Any information provided has been prepared = from sources believed to be reliable but is not guaranteed, does not = represent all available data necessary for making investment decisions = and is for informational purposes only. Information received by or sent = from this system is subject to review by supervisory personnel, is = retained and may be produced to regulatory authorities or others with a = legal right to the information.

Confidentiality Notice
This = e-mail message is intended only for the use of the designated recipient. = If you are not the intended recipient, please do not disseminate, = distribute or copy this communication. Please notify the sender = immediately by return e-mail and then delete and discard all copies from = your system. E-mail cannot be guaranteed to be secure, error-free or = free from viruses. Garden State Securities, therefore, does not = represent that this message is accurate or timely and it may not be = relied upon as such.

 

 

This e-mail may be privileged and/or = confidential, and the sender does not waive any related rights and = obligations. Any distribution, use, or copying of this e-mail or the = information it contains by other than an intended recipient is = unauthorized. If you receive this e-mail in error, please advise me = immediately (by return e-mail or otherwise). Unless specified by the = sender, e-mail messages are not encrypted. As such, sensitive = information sent to or received from this e-mail address may not be = secure. Information received by or sent from this system is subject to = review by supervisory personnel, is retained, and may be produced to = regulatory authorities or others with a legal right to the information. = Garden State Securities, Inc. Member FINRA/SIPC

 

 

This e-mail may be privileged and/or = confidential, and the sender does not waive any related rights and = obligations. Any distribution, use, or copying of this e-mail or the = information it contains by other than an intended recipient is = unauthorized. If you receive this e-mail in error, please advise me = immediately (by return e-mail or otherwise). Unless specified by the = sender, e-mail messages are not encrypted. As such, sensitive = information sent to or received from this e-mail address may not be = secure. Information received by or sent from this system is subject to = review by supervisory personnel, is retained, and may be produced to = regulatory authorities or others with a legal right to the information. = Garden State Securities, Inc. Member FINRA/SIPC =

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