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Rebranding Proposal August 2016 0

TEN

Rebranding Proposal Prepared by Samuel Castaneda under the consultation of Anthony Gonzales

Table of Contents I. Executive Summary .............................................................................................. 2

Highlights

Objectives

Mission Statement

Keys to Success

II. Description of Business ........................................................................................ 3

Company Ownership/Legal Entity

Location

Hours of Operation

Products and Services

Suppliers

Manufacturing

Management

Business Development Units

Start-Up/Acquisition Summary

III. Marketing ............................................................................................................. 9

Market Analysis

Market Segmentation

Competition

IV. Appendix .............................................................................................................. 11

Start-Up Expenses

Determining Start-Up Capital

Cash Flow

Resume

NDA

MKT Analysis

Milestones

REBRANDING PROPOSAL - AUGUST 2016 2

Executive Summary

This proposal’s purpose is establish a strategy to rebrand through the launching of Ten X, a new venture focused on the agriculture industry. Ten X’s primary focus will be on dairy, including but not limited to, chemicals, equipment, installation, and service required to operate a dairy farm. Ten X will make use of the latest technology, science, research, and business curriculum to develop strong competitive advantages that can be leverage to win new business and operate an entity with optimal efficiency.

Highlights

Ten X’s ascendancy will be the result of using proven business methodologies, such a SCRUM project management method and best practices, to minimize cost associated with system inefficiencies, toxic practices, and antiquated procedures that currently inhibit potential Dairy services companies from their full potential

Objectives

The main objective, and milestone of success, will be rebranding through the successful merger and acquisition of the following business ventures: Specialized Dairy Service [SDS], a full service dairy operation based in Ontario, CA and Southland Dairy Equipment [Southland], a dairy services entity based in Roswell, NM.

Upon mutually agreed negotiations, Ten X would integrate select aspects of SDS to leverage the existing assets, skilled employees, and knowledge base. Ten X would also merge Southland, in its entirety, into core business operations. Effectively forming a conglomerate to reduce cost through economy of scale and to optimize the effectiveness of current practices through hive-knowledge.

Mission Statement

Analysis. Plan. Execute. Review.

Keys to Success

The following are a few examples that Ten X plans to implement into its business model design which has been verified through the LEAN start-up venture principals:

• Implementation of inventory management system

• Installation of maintenance assistants MACMMS

• Using scrum methodology for equipment installation

• Creation of datasheets for customers products

• In-depth analytics for: Route management, Chemical procurement, and Facility operations


Description of Business

The general business operations of Ten X will focus on supporting and maintaining dairy operations in their entirety. Ten X will offer full-turnkey services for dairy equipment, installation, and services. Furthermore, Ten X will demonstrate its superior industry knowledge to deliver cutting edge chemical services packages, which are a requirement to operate a dairy. This will be accomplished through the abundant tacit knowledge internal to the executive leadership team.

Company Ownership/Legal Entity

As a newly formed venture, Ten X will incorporate as a Delaware C-corporation, as is business practice for new ventures that one day would like to seek venture funding and investment from traditional sources. Ten X Inc., will be a whole owned subsidiary of C&S LLC. Ten X will acquire and own select assets from SDS, and will merge Southland into its future operations.

Location

The Headquarters for Ten X will be located in Northern Orange County, and this location will maintain the Executive staff, Administration, Dispatch, Procurement, Accounting and other supportive roles.

Additional Locations of operations can be found in: Clovis, NM: Responsible for equipment maintenance for this region of operation

Dumas, TX: Chemical Mixing operations

Roswell, NM: Equipment maintenance

There is a potential to also establish an equipment based operation in Amarillo, TX

Hours of Operation

While we acknowledge most farming operations work above and beyond standard business hours. It will be a primary goal of Ten X to have its operators work scheduled 8-hour shifts, and reserving overtime for emergency and on-call situations only.


Products and Services

• Electrical: 12/24/115/230/277/480

• Electronics: PLC building, PLC wiring, programing, control wiring, switches, replays, measurements, digital analysis

• Vacuum and Pulsation

• Milking routine, barn, and teat evaluation

• CIP & Chemicals

• Refrigeration’s & Plate exchangers

• Air compressors & air drivers

• Welding, stick, wire feed (MIG), TIG, purge gas brazing, gas soldering,

• Plumbing, rudimentary fluid dynamic

• Water heater & boilers

• Heating & air conditioning

• Gas, natural gas & propane

• Controls & wiring, temperature pressure, pumps, float baths

Suppliers

Ten X will leverage existing relationships that have been established through industry experience within the executive team. The following are suppliers that will most likely assist in Ten X’s success:

• Afimlik , Wintergold, Milkritz, Delaval, GEA, Shepard Brothers, Baumatic, Thatcher

Manufacturing

Through the successful acquisition of selected assets of SDS, Ten X will be able to maintain and support on-site manufacturer of Dairy equipment at its headquarters. Ten X will be fully capable of producing an array of necessary equipment for a dairy operation. Such as: Calf milk pasteurizers, calf supplies, bottle fillers, VAT pasteurizers / cooling storage, PMO pasteurizers, Hot water systems, mixing tanks, C.I.P. controllers, and other relevant machine systems.


Management

The following structure is an expected hierarchy, contingent on available parties post-merger.

Roles and Responsibilities:

Samuel: Chief Executive Officer, responsible for supporting and assisting executive management team, and guiding the overall strategy vision of Ten X.

Jason: Chief Technical Officer, Dairy Engineer. Responsible for his team, dairy construction, installation, cooling systems, bottle fillers, VAT pasteurizers, pasteurizers, water heating units, turning tanks, and other similar operations required to operate and maintain a dairy operations.

An example of his team may include: Brett Fontaine, I.E.E., Jose Figuera Ch.E., Jake Fix, C.S. Robert Mesa, M.E. Shawn Rayan, PLC Prog. As well as supporting engineering interns.

Samuel CEO

Edward Fabrication Gina Compilance Jerry Procurement

Leo COO Jason CTO

Marinus Director Vicente CCO


Vicente: Chief Chemical Officer, B.S Animal Science, will be responsible for Chemical analysis for both profitability and effectiveness, Chemical managerial processes and training, Chemical Service, and development of the Ten X Chemical Certification Training Program.

An example of his team may include: Kristoffer Hammerback, Chem Tech, and Dave Ferris, Chem Driver. This team would be responsible for maintaining customer’s chemical systems, including washes, pumps, inspections, deliveries, titration, blending, customer relations, bacterial count management and inventory management.

Marinus: Dairy Director, will be responsible for compost management, calf management, dairy feed, dairy management, nutritional analysist.

An example of his team may include: Abraham Duplesis PhD nutritional science, as well as support through the local universities internship programs for STEM.

Gina: Compliance Officer, Head Administrator, Office Manager, and will support the various intra-office departments such as: Dispatch, Procurement, Accounting and other supportive roles. The following departments that Gina will support are:

• Secretarial: comprising of Sheryl and Wendi Tesimale. These individuals will manage, payroll, banking, data entry, accounts receivable, reception, billing, accounts payable, part changes, and ticket auditing.

• Procurement: Managed by Jerry Woodrard, established to support the infield technicians and vendor management

• Dispatch: Joesph Brown, responsible for dispatching technicians to clients, optimizing route management, and maintain efficient logistic processes.

• Internship: Gina will be responsible for managing the various individuals involved in the Ten X internship programs.

Branch Manager: a prospective individual for this position may be Tori Castro, this role would require the individual to lead a team, execute projects, plan work schedules, and establish quality controls & assurances.

Fabrication: An analysis of potential candidate for the shop manager position has identified Edward Hernandez. This position would be responsible for: Project FAB management, FAB training, shipping, fabrication, pasteurizer building, PLC building, VAT building and shop hands.

Field Tech Managers: This position will require a deep understanding of the full spectrum of technical requirements that one may be exposed to in dairy operations. This is a position of leadership and will require responsibility for training new technicians, maintenance inspection, job


carryout, overseeing job sites, generating accurate quotations, project auditing, and leveraging the Ten X electronic ticketing system. The following are potential candidates for this position:

• Frank Mendoza, Steve Boersma, Paul Coehlo, Scott Evartt, Jeremy Williams

Field Technicians: Ten X Techs will be responsible for the following services as it pertains to dairy operations: routine maintenance, vacuum procedure, air compressors maintenance, gas regulation, sanitary welding, pulsation, structural welding, control instruments, refrigeration services, milking equipment, plumbing, electrical service, CIP systems, heating and cooling management. The following are potential candidates for this position:

• Junior Pliego, Vince Triglllo, Sigi Alderte

Ten X’s Business Development Units

Services [PERCENTAGE]

Installation [PERCENTAGE]

Chemicals [PERCENTAGE]

New Business 4%

Revenue Streams

Chemicals

Installation

Service

New Business


Target Revenue $12mm

Start-Up/Acquisition Summary

The following scenarios are just a few of the numerous permutations of possible outcomes for the possible acquisition of SDS and merger of Southland.

• Southland acquisition through continued distribution of shareholder equity. Historic company information was used to forecast potential future earnings. Leo would be compensated with half of the distributions, for the next X years.

• At this time, more information is needed before proposal for SDS can be offered

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Salary

Shareholder Distribution

$280,093 $283,629 $333,628 $510,282 $923,169 $1,107,803 $1,307,207 $1,516,360 $1,728,651 $1,936,089

Leo’s Distribution

$280,093 $283,629 $333,628 $510,282 $923,169 $1,107,803 $653,604 $758,180 $864,325 $968,045

Che

mic

als •  Target

Margins 40%

•  Target Revenue $1.55mm

Inst

alla

tion •  Target

Margins 35%

•  Target Revenue $3mm

Serv

ice •  Target

Margins 45%

•  Target Revenue $7mm


Marketing

While there are several principles, thought-processes, and methodologies that could be leveraged, Ten X’s main marketing strategy will be to provide great service while creating a branded experience. In order to do so the entire customer experience must be trouble-free, consistent, satisfying, and memorable, from the first interaction to the final payment on an invoice. The following is an example of typical routine service visit:

• Dairymen would receive personalized phone call from Ten X customer service rep, inquiring about scheduling a routine maintenance.

o Initial phone call would be followed up with an email and a digital link to their accounts within Ten X’s online platform.

• Dairymen would receive updated ETA, the day of the schedule visit, via text message.

• A uniformed Technician would arrive in company vehicle and provide a face to face encounter with the customer, asking permission and inquiring if the dairymen has any other business to win. (Opportunity to upsell other activities, while on site by identifying possible concerns)

o It is imperative that the Ten X representative completes the initial assigned task prior to engaging in other business services.

• Ten X Technician would evaluate dairymen’s operational equipment and deliver a concise report, detailing work completed, and suggestions moving forward via a digital system.

o Technician would confirm work by documenting with photographs uploaded to internal system.

• Within one business week, a Ten X customer service representative would perform follow up contact with dairymen requesting a simple rating of technician’s performance.

o This rating would be used to assessed performance based compensation

Market Analysis

After a careful study of current providers for equipment and chemical needs it is clear that execution of best practices is the biggest hurdle for growth. Most competitors have gone through a stage of massive growth, spreading too thin. Ten X is aimed to master the execution of best practices and implement strong customer services experiences versus our competition.

See Appendix


Competition

The strategy and executives of Ten X’s business services will demonstrate strong competitive advantages establishing a new expectation of quality of services. The following companies have been identified as potential competition to Ten X. However, it is believed that a majority of these companies are operating below optimal efficiency.

• Saul Valley Dairy Products, NM | Muleshoe Vet, TX. | Automated, Herefor TX & Portales, NM. | Dairy Direct| Future dairy services, NM | Micro Technologies, Amarillo TX | United Dairymen Association (UDA), Muleshoe TX | W.S West GEA, TX | Miguel Diary Service, TX |

Strategy and Implementat ion Before Ten X can form as a new venture, unanimous consent and quorum, must be received from the following individuals:

• Samuel Castaneda | Jason Swart | Vicente Lopez | Marinus Dijkstra | Joe Trujillo

Once the relevant parties have agreed to the investment proposal, negotiations on compensation, ownership, and company structure can begin.


Appendix

Payroll Expenses – Ten X

Leadership Annual Salary Leadership Dollar Amount

Samuel Castaneda $ 200,000 Sub-total Annual $ 885,000

Jason Swart $ 200,000 Monthly Burn $ 73,750

Vicente Lopez $ 200,000

Leo Southland Paid in Profit Sharing

Marinus Dijkstra $ 150,000

Field Techs (Hourly) - $40/hr Field Techs

Paul Coehlo $ 83,520 Sub-total Annual $ 417,600

Jeremy Willems $ 83,520 Monthly Burn $ 34,800

Frank Mendoza $ 83,520

Steve Boersma $ 83,520

Techs Training (Hourly) - $24/hr Techs Training

Sigi Alderete $ 50,112 Sub-total Annual $ 200,448

Shawn Ryan $ 50,112 Monthly Burn $ 16,704

Vince Trujillo $ 50,112

Junior Pliego $ 50,112

Chem Techs (Hourly) - Chem Techs

Kristoffor Hammerback - $24 $ 50,112 Sub-total Annual $ 93,960

Dave Ferris - $21 $ 43,848 Monthly Burn $ 7,830

Admin (support) Admin (support)

Gina Stocksdale $ 52,000 Sub-total Annual $ 207,312

Wendi Tesimale - $24/hr $ 40,000 Monthly Burn $ 17,276

Sheryl Elison - $25.5 $ 50,112

Jerry Woodword $ 65,000

Edward Hernandez - $25 $ 52,200

TOTAL PAYROLL – 12 MONTHS $ 1,804,320 MONTHLY BURN $ 150,360


Expected Cost:

Annually Monthly Amount over Budget

Expenses:

Salaries/Wages $1,804,320 $150,360

Payroll Expenses $70,000 $5833

Health Insurance

(20) Employees

$8000 $667

Startup Cost $25,000

Travel

Inventory

Utilities

Rent

TOTAL COST

Determining Start-Up Capital In order for Ten X to begin and initial capital infusion $25,000-$45,000 will be required. It is reasonable to expect legal fees, accounting fees, and consultation fees to complete this process. It is recommended that professionals be hired to manage the actual merger and acquisition to ensure every party involved is treated fairly and with good-faith effort.

Milestones

• Present Investment Proposal

• Coordinate all parties agreeance

• Conduct Due Diligence

• Negotiate compensation

• Establish official corporate structure

• Develop Ten X’s internal process, procedures, infrastructure, define best practices, establish on-boarding protocol

• Inform relevant employees

• Inform relevant customers

• Merge Southland

• Acquire SDS

• On-board new employees

• On-site training

• Define trail and probationary period for internal metrics

• Conduct after action review on merger and acquisition

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