Series A milestones
VRM Labs is seeking to raise $1.9M in Series A to fund full-scale production and bring us to positive balance by mid 2016. A raise could be arranged in two tranches around the milestones described below. · Application for and procurement of regulatory approval. · Scaling up and construction of a pilot plant. · Full-scale production.
Interest in new natural antioxidants is currently especially high in rendering and pet food industries.
· Customers do not want to see synthetic components in their pets’ food.
· However, natural antioxidants are 5-20 times more expensive than synthetic antioxidants, and are not as efficient.
· Thus, inexpensive and capable natural antioxidants are of great demand by the industry.
· Regulatory agencies have concerns about some synthetic antioxidants.
PROT-X™ – differentiators
Our product can be marketed as natural and be considerably less expensive but more efficient than competitors. · Application of 0.125% Prot-X™ provides adequate protection against fat oxidation in a number of food models; · Efficacy is equivalent to that of ethoxyquin and BHA/BHT, best synthetic antioxidants; · Shelf life of at least 9 months;
· Regulatory pathway – AAFCO definition (7-18 months, pilot marketing is allowed by some states prior to approval).
Mark M., VP of Operations
Pet Food Company
...pets are very sensitive to olfactory stimulation so flavor stability is extremely important. Rancidity in rendered products is non-negotiable"
Key milestones achieved during the
pre-commercialization phase · Demonstrated efficacy similar to the competition and a shelf life of at least 9 months; · Determined steps and timeline for obtaining regulatory approval; · Performed market research and customer development interviews; · Business Plan and Business Prospectus available.
Marketing opportunity · Global market size for pet food and animal feed antioxidants is $600M. · Corresponding U.S. market size is $200M. · 100% of animal byproduct renderers and 95% of pet food manufacturers we interviewed (total >50 interviews) told us they would be very interested in a less expensive but efficient natural antioxidant. · Global market size for human food antioxidants (such as pre-cooked meats) is $700M. · Human food antioxidants will be our second-generation product. Production process is inexpensive leading to high anticipated gross profit margin. Due to high efficacy, one production facility capable of processing 25 tons of blood per day (one truck load) will be able to supply enough antioxidant to cover entire U.S. pet food market. Therefore, our pilot plant is anticipated to eventually become our full-scale production facility.
Samples of Freshpet Select cat food stored for 90 days: left - in refrigerator at 4°C, second left - at 37°C; second right – at 37°C protected by 150 ppm of ethoxyquin (current “gold standard” synthetic antioxidant); right – at 37°C protected with 0.125% PROT-X.
...the general attitude that natural is better than anything synthetic is not scientifically correct but the perception is very strong.
Mark M., Director for Quality control
Major Pet Food Company
National Renderers Association
· VRM Labs is the owner of a novel technology for manufacturing cost effective natural food preservatives for applications in pet food and animal feed industries.
· Prot-X™ is a potent natural antioxidant extracted from animal or avian erythrocytes. It is as efficient as current synthetic antioxidants and provides considerable cost savings compared to current natural antioxidants.
· VRM Labs has validated the efficacy of Prot-X™ in a number of food models including beef, turkey and chicken meat, pet food, as well as in a 100% chicken fat and cod oil models.
· VRM Labs is in unique position to achieve success because of the strategic support from rendering industry, which funded development of Prot-X™ in academia and is very interested in seeing this technology commercialized.
· VRM Labs is now raising a Series A round of funding to perform scaling up of the technological process, receive regulatory approval, and start pilot sales of Prot-X™.