NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR ANY OTHER PERSON. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON.
Our Company
Indoor Harvest Corp., or the "Company," is a Texas corporation formed on November 23, 2011. Our principal executive office is located at 5300A East Freeway Houston, Texas 77020.
Business
Indoor Harvest Corp, through its brand name Indoor Harvest™, is a design build contractor, developer, marketer and direct-seller of commercial grade aeroponic and hydroponic fixtures and supporting mechanical systems for use in urban Controlled Environment Agriculture ("CEA") and Building Integrated Agriculture ("BIA").
CEA is the process of manipulating any agricultural technology to allow the farmer an ability to manipulate a crop's environment to desired conditions. Technologies include greenhouse production, hydroponics, aquaculture, aquaponics and aeroponics. Controlled variables may include temperature, lighting, humidity, pH and nutrient analysis.
BIA is the process of locating CEA methods on, or in, mixed use buildings to provide synergy with the buildings infrastructure and the agriculture process. Earliest examples of BIA include the use of hydroponics, aeroponics and aquaponics, where waste heat is captured through the buildings existing heating, ventilation and air conditioning system as well as the combined use of solar, rainwater collection and evaporative systems. Current operating examples include such buildings as Eli Zabar's rooftop greenhouse, The Sun Works Center for Environmental Studies, Gotham Greens, Sky Vegetables, Top Sprouts, Cityscape Farms, Dongtan, Masdar City, AeroFarms, Solar 2, Lufa Farms, BrightFarms, FarmedHere, Green Sense Farms, Green Spirit Farms and Big Box Farms. The term building-integrated agriculture was coined by Dr. Ted Caplow in a paper delivered at the 2007 Passive and Low Energy Cooling Conference in Crete, Greece.
We currently offer a vertical farm racking system with integrated LED lighting. Our vertical farm racking system was designed to be used for both aeroponic and hydroponic layered crop production within a CEA or BIA operation. Our racking system will work with any standard 48" X 96" or 24" X 48" third party flood table or aeroponic system. We also offer patent pending aeroponic fixtures that are compatible with our vertical farm racking system. We are developing our vertical farm racking system and aeroponic fixtures for use by both horticulture enthusiasts and commercial operators who seek to utilize vertical farming methods within a controlled indoor environment.
Aeroponics is the process of growing plants in an air or mist environment without the use of soil or an aggregate medium (known as geoponics). Aeroponic culture differs from both conventional hydroponics and in-vitro (plant tissue culture) growing. Unlike hydroponics, which uses water as a growing medium and essential minerals to sustain plant growth, aeroponics is conducted without a growing medium. Because water is used in aeroponics to transmit nutrients, it is sometimes considered a type of hydroponics.
The Company intends to generate revenue from vertical farm rack system sales, aeroponic fixture sales and design build construction management services. Our products are designed for the production of aeroponic and hydroponic leafy greens, micro-greens, fruiting plants and herbs. Our fixtures and systems can also be adapted for a variety of other uses such as horticulture research, medicinal plant production, pharmaceutical plant production, plant cloning and hardwood propagation.
Our Products
There are currently several different growing technologies being deployed in urban vertical farming operations. The most common of these technologies include; nutrient film technology, ebb and flow systems, drip irrigation, water culture systems, aquaponic raft systems and aeroponic systems. Our Company has chosen to focus on the development of aeroponic and vertical farm framing fixtures and supporting systems for the urban vertical farming industry. Aeroponics is a method of growing plants in a sealed environment by suspending plant roots in an automated atomized liquid nutrient environment. Hydroponics is a subset of hydroculture and is a method of growing plants using mineral nutrient solutions, in water, without soil.
The Indoor Harvest™ patent pending "Modular Aeroponic System and Related Methods"
The aeroponic environment being free from pests and disease, we believe plants grow healthier and more quickly than plants grown in a medium. We believe that CEA and BIA advances plant development, health, growth, flowering and fruiting for any given plant species and cultivars. There are two types of aeroponics commonly used and they are described as follows:
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Low Pressure Aeroponics ("LPA") - LPA systems utilize high volume, low-pressure pumps and low pressure misting, or spray nozzles. Low-pressure nozzles require large orifices to disperse the nutrient solution resulting in increased water usage. Due to the large amount of water used, the majority of LPA systems recirculate the nutrient solution to minimize water and fertilizer usage.
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High Pressure Aeroponics ("HPA") - HPA systems utilize a low volume, high-pressure pump and high pressure misting, or fog nozzles. The higher pressures when used with an appropriate nozzle create an atomized mist or fog. Unlike LPA designs, HPA can utilize drain to waste configurations for easier operation due to minimal water usage. Average nutrient solution particle size is 50-80 microns.
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The Indoor Harvest™ Modular Aeroponic System is based around seven primary fixture components. These fixtures consist of an Aeroponic Growth Tray, Aeroponic Growth Lid, Aeroponic Spray Manifold, Aeroponic Pressure Manifold, Nutrient Delivery System, Recirculating System and Lift Station. The individual fixtures are combined to create a variety of aeroponic system configurations and allow for modular system construction. As of June 30, 2015, the Company had completed four prototype system tests. The chart below briefly describes the development status of our seven primary fixture components.
Fixture Component
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Development Stage
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Planned Future Development
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Aeroponic Growth Tray [manufactured from durable FDA approved food grade high-density polyethylene]
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Ready for Production
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Tooling for additional sizes
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Aeroponic Growth Lid
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Ready for Production
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Tooling for additional sizes
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Aeroponic Spray Manifold
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Ready for Production
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None planned
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Aeroponic Pressure Manifold
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Ready for Production
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Specific application development needed for additional sizes
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Nutrient Delivery System
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Ready for Production
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Specific application development needed for additional sizes
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Recirculating System
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Ready for Production
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None Planned
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Lift Station
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Ready for Production
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None Planned
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We anticipate being ready to begin production and sales of our aeroponic fixtures in the fourth quarter of 2015. We need no additional funding to begin manufacturing.
Indoor Harvest™ Support Systems for Aeroponics
In addition to our line of aeroponic system fixtures, we also intend to offer private labeled supporting systems for large commercial installations for CEA and BIA farming. These include both wall mount and frame mount reverse osmosis ("R/O") systems ranging in size from 250 gallons per day to over 19,000 gallons per day from Applied Membranes, Inc.. We also intend to offer private labeled inline and drop in chillers ranging from 1/5 HP to 1/2 HP from Trade Wind Chillers.
The use of a R/O system within an aeroponic system can dramatically reduce the potential for maintenance issues such as the clogging of nozzles, solenoids and pumps by filtering incoming system water to below 20 parts per million. Both inline and drop in chillers can also be added to an aeroponic system to chill the nutrient solution thereby increasing dissolved oxygen content of the nutrients and lowering the temperature of a plants root zone. Higher dissolved oxygen and cooler root temperatures promote faster plant growth.
Indoor Harvest™ Vertical Farm Framing System
We have developed a modular framing system that can be used with our aeroponic fixtures or can be used for hydroponic vertical farm installations such as deep water culture, flood and drain or nutrient film technique using third party products. The framing system is based upon the Unistrut framing platform which will make it very versatile in how it is installed and incorporated into mechanical systems. The design uses an open slot face which will allow precise leveling no matter how uneven the floor is. We have designed the frames to use the Illumitex® brand ES-1 and ES-2 fixtures out of the box without modifications or custom electrical fabrication. The framing is designed to work with any style 4' X 8' hydroponic tray. The system allows for the vertical installation of aeroponic or hydroponic production systems.
We begin offering our vertical farm framing system on July 1, 2015. We currently do not require any additional funding to begin manufacturing and sales. Depending on a client's location and order size, we can manufacture our frames in-house or we may sub contract to third party manufactures. We currently do not have any agreements with third party manufacturers.
Operational Activities
Since our inception, we have engaged in the following significant operational activities:
On September 18, 2013, the Company entered into a material transfer agreement with the Massachusetts Institute of Technology's Media Lab ("MIT Media Lab") to provide aeroponic system components and fixtures to be used for the purpose of developing a wall facade aeroponic system as part of MIT Media Lab's Changing Places research. The project, MITCityFarm, will focus on urban mobility networks, decentralized energy infrastructure and transformable housing units to advance urban agricultural systems. Indoor Harvest, Corp. will be responsible for providing technical assistance and materials as a "Technical Systems Adviser" to the MITCityFarm project. This is a demonstration project only. The equipment may only be used for education or not for profit purposes. The Agreement provides that we are providing our equipment at no cost.
On February 20, 2014, we entered into a 62 month lease with Daniel R. Davis, commencing on March 1, 2014 through April 30, 2019, for a total of 10,000 sqft. of warehouse and office space located at 5300A East Freeway, Houston, Texas 77020. The monthly base rent is $4,200 increasing 6% every two years for the term of the lease. The property is adequate for all of the Company's currently planned activities.
On March 1, 2014, we relocated our equipment to this leased space and ceased operations at our original research and development facility.
On December 18, 2014, we entered into a Cannabis Production Pilot Agreement ("Agreement") by and between Indoor Harvest Corp. ("Indoor Harvest"), a Texas Corporation, and Tweed Marijuana Inc. ("Tweed"), a Canadian company.
Tweed Marijuana Inc. is a TSX Venture Exchange listed company. Its wholly owned subsidiaries Tweed Inc. and Tweed Farms Inc. (formerly Prime1 Construction Services Corp.) are licensed producers of medical cannabis in Canada. The principal activities of Tweed are the production and sale of cannabis through its wholly owned subsidiaries out of Tweed Inc.'s facility in Smiths Falls, Ontario and Tweed Farms Inc.'s facility in Niagara-on-the-Lake, Ontario as regulated by the Marihuana for Medical Purposes Regulations.
Set forth below is a brief description of the terms and conditions of the Agreement that are material to Indoor Harvest:
The Pilot Project will test the production of Cannabis using an aeroponics system designed by Indoor Harvest. The Pilot Project will make a record of the growth rate, phytocannabinoid production, water usage, fertilizer usage and labor using the aeroponics system(s) provided by Indoor Harvest. The recorded data from the Pilot Project will be compared to Tweed's existing production methods. At the conclusion of the Pilot Project, upon review of the data, Tweed and Indoor Harvest shall jointly secure intellectual property rights for the resulting aeroponics system(s) (at each Party's discretion as to whether they wish to participate in intellectual property filings) and Indoor Harvest will be provided manufacturing rights.
The Pilot Project is broken into two separate phases, as follows:
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During Phase One, tests will be conducted using equipment initially provided by Indoor Harvest. The purpose of Phase One is to test the initial design and evaluate the root mass development of various strains of Cannabis chosen by Tweed.
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Upon completion of Phase One, Tweed, based on the results of Phase One, will have the option to request Design Build services
to be provided by Indoor Harvest. Indoor Harvest will provide these services free of charge. Indoor Harvest will provide projected costs associated with the manufacture and installation of the new aeroponics designs. Tweed will then have the option to purchase equipment from Indoor Harvest based on these projected costs. There is no obligation to purchase equipment under the Agreement.
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Indoor Harvest will be responsible for providing all the equipment related to the aeroponics system being tested, to include a temporary partitioned testing lab structure to be used within Tweed's existing facilities and the cost associated with delivery and installation of the aeroponics system and testing lab, including design changes and subsequent changes based on feedback from Phase One testing.
Tweed will be responsible for providing adequate space in a Controlled Environment for testing purposes to include water service, local area drain and electrical service. Tweed will also provide the personnel and labor to operate and maintain the equipment provided by Indoor Harvest. Tweed will make a reasonable effort to provide Indoor Harvest with weekly updates to include photographs of the plants being grown and their root development as well as all associated data required under the Agreement.
The Pilot Project shall be conducted for a period (the "Pilot Period") commencing on the date of this Agreement (the "Commencement Date") and ending (the "Termination Date") upon the earlier of (a) the parties' mutual determination that the Pilot Criteria has been satisfied or (b) one year after the Commencement Date. This agreement can be extended if both parties mutually agree in writing.
Upon completion of the Pilot Project, Indoor Harvest and Tweed will jointly apply for patents ("New IP") on the technology developed under the Pilot Agreement. Tweed will be provided exclusive rights to cultivate cannabis using the New IP in Canada and other jurisdictions outside the United States, at a royalty-free rate for the duration of the patent (including any extension of the patent). Indoor Harvest will have exclusive royalty-free rights to cultivate cannabis using the New IP in the United States for the duration of the patent (including any extension of the patent) and will be provided rights to use the New IP in all jurisdictions, royalty-free, for the cultivation of all other species of cultivars, to specifically exclude cultivation of cannabis using the New IP. Indoor Harvest will only have rights to cultivate cannabis in the United States using the New IP. All of these rights are intended to be for commercial production of cultivars.
Indoor Harvest will be provided exclusive manufacturing rights for a period of 10 years on the New IP developed under the agreement. All equipment manufactured by Indoor Harvest will be provided to Tweed by way of a "cost plus agreement" not to exceed 15% allowable for profit.
Both parties are responsible for the costs associated with meeting their obligations outlined in this Agreement. Under no circumstance, do Tweed's costs exceed those associated with the cost of plants, labor and general costs of production including water and electricity. However, any costs related to third party laboratory analysis and testing of phytocannabinoids will be shared equally by both parties.
On March 31, 2015 the Company announced the signing of a LOI with the City of Pasadena, Texas to fund the establishment and provisioning of an indoor agricultural facility (vertical farm) to be located in Pasadena, Texas. Under the LOI, the City was to provide Indoor Harvest, or a partner of their designation with City approval, with two facilities owned by the City for the sum of ten dollars ($10.00) per annum for a period not to exceed twenty (20) years as well as provide tax abatements on these properties for use in the construction of a Community Located Agricultural Research Area ("CLARA") project. In addition, the Pasadena Second Century Corp. (economic development entity for the City of Pasadena) has been asked by City officials to consider a budgetary proposal of $500,000 as seed money for the project's economic development portion in north Pasadena.
The CLARA project, based on current negotiations, is expected to be divided into two phases. Phase One will focus on developing the non-profit aspects of the project and is envisioned to include the construction of a 6,000 sq. ft. vertical farm R&D facility and 6,000 sq. ft. of classroom and office space. Phase Two is envisioned to support a commercial retail operation on approximately two acres of land and additional properties adjacent to the vertical farm and education centers.
The Phase One vertical farm facility is intended to serve dual roles, with Indoor Harvest using the facility as a demonstration farm and R&D facility and Harris County BUILD Partnership, a non-profit group, using the facility for educational and charitable purposes. It is anticipated that the crops grown will be donated, or sold at cost, to provide fresh produce to low income families in the North Pasadena area. The entire proposed campus area, almost two city blocks, will be designed and built to allow the flow of tourists without impacting operations. The City has been asked to develop a project overview to be presented in August to department heads at the Pasadena Independent School District's Kirk Lewis Career & Technical High School and the Continuing and Professional Development Department of San Jacinto College regarding academic curriculum development to be located at the CLARA campus.
Based upon an existing timeline provided by the City and the current status of negotiations between the parties, it is anticipated that the project MOU will be finalized and property lease executed by the end of August 2015. Under the timeline, construction on Phase One is planned for completion June 2016. As of the date of this Report, we do not yet have a binding agreement concerning this Project
Phase Two of the project is anticipated to be developed on two acres of land and additional buildings currently available adjacent to the existing properties being provided by the City. Indoor Harvest, as the primary developer of the campus, expects to be able to provide commercial operators who build on the CLARA campus a unique group of incentives and key advantages in regards to distribution, manufacturing intelligence and access to resourcing and key agricultural production talent. The City of Pasadena is currently working to secure additional land surrounding the CLARA campus for use by commercial partners.
We are currently in the final stages of negotiating terms with City Farms America, LLC and EB5 Solutions, LLC, to build commercial operations on the CLARA campus. EB5 Solutions would be responsible for providing investment capital to City Farms America for the construction with terms that include a multi-State expansion plan of the CLARA model. Indoor Harvest would act as the primary design build contractor for both CLARA construction and future expansion plans. We are currently negotiating terms with City Farms America and EB5 Solutions in connections with the MOU for CLARA. As of the date of this Report, we do not yet have a binding agreement with these entities.
In addition, City officials are currently considering creating a tax increment reinvestment zone (TIRZ) in the immediate area surrounding the CLARA campus. A TIRZ is a public financing structure that Texas law allows to target tax revenue helping to support redevelopment in underserved areas. Such a zone, if created, could provide an additional economic incentive for tangential services to locate on the project site. As of now, the City is not obligated to create a TIRZ zone and no such zone may ever come to fruition.
On April 15, 2015, the Company signed a LOI with PUE 1.0. Under the terms of the letter of intent, it is anticipated that a final agreement will include the following terms: Indoor Harvest will be responsible for the design of a vertical farming system and its related systems. PUE 1.0 will be responsible for the design of a HVAC system to be used with Indoor Harvest's vertical farming design. Both parties have agreed to share any data during the development stage. PUE 1.0 will retain all rights to its intellectual property and any new intellectual property developed as part of the collaboration. Indoor Harvest will be provided exclusive rights to market and distribute the final design for a period to be determined by way of a memorandum of understanding, to be finalized in connection with the closing of terms outlined in our letter of intent with the City of Pasadena. During the development stage, all equipment to be provided by PUE 1.0 for the purpose of the technology and economic pilot to be constructed at the 112 N Walter property will be provided at cost.
We currently depend on five firms to manufacture our aeroponic and vertical farm framing systems, from or with which we have supply arrangements with and/or with which we private label, distribute and purchase from these five firms, respectively, on a purchase order basis, two in Texas, two in California and one in Florida to produce, our aeroponic system components. We have only verbal agreements with suppliers and purchase our products on a purchase order basis from the suppliers, but we believe we could easily find alternative suppliers for each of these suppliers and/or users of our tooling, even for those such as Freeman which is located a significant distance from our offices, at no significant increase in price and with no or no significant interruption in our production process. These firms and what they do for us are as follows:
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Freeman Engineered Products, located in Burnet Texas, currently provides us with our high-density polyethylene ("HDPE") products using tooling that we own. Although they are holding our tooling at no charge to us, we are free to remove our tooling to another location or to another rotational molding company at any time. This could be made more difficult because one of our suppliers, Freedman Engineered Products both holds our tooling and is located a significant distance from our office. Accordingly, we might experience some production logistic products if we had to remove our tooling to another location or to another rotational molding company at any time, but as described below do not believe the effect would be significant.
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Illumitex, located in Austin Texas, provides us with LED lighting systems. We have a verbal agreement with Illumitex to provide us with wholesale pricing and to be listed as a "vendor partner" on our website.
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Applied Membranes, located in Vista California, provides us with our reverse osmosis ("R/O") products. We have a verbal agreement with Applied Membranes to provide us with private label components and to be listed as a "vendor partner" on our website.
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Dosatron, located in Clearwater Florida, provides us with water injection technologies. We have a verbal agreement with Dosatron to use their products in our systems, act as a distributor and be listed on our web site as a "vendor partner".
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We have a verbal agreement from Trade Wind Chillers in Escondido California to provide private labeled chillers ranging in size from 1/5 HP through 1/2 HP.
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We have no formal written agreements with any of these five companies.
Any change in suppliers/manufacturers or problems with our existing suppliers/manufacturers could disrupt or delay our ability to fulfill orders for our aeroponics systems while we search for alternative supply sources, provide specifications, and test initial production. However, based upon management's knowledge of the industry, we believe we could locate alternative firms without any significant difficulty or increase in prices, even with firms such as Freeman which is located a significant distance from our office. If we needed to change suppliers/manufacturers and there were to occur any significant time delay in locating alternative firms, which we do not currently anticipate, our business prospects, results of operations and financial condition could be materially and adversely affected.
The Company has engaged in significant research and development activities as described below.
Research and Development
On September 14, 2012, the Company began research and development on its prototype designs. The Company has incurred $36,080 in research and development expenses for the period from inception to December 31, 2014. Chad Sykes, our sole Founder and CEO, was responsible for the development of our prototype designs and providing the space required to complete our proof of concept prototyping which was done within his garage, at his personal residence at 14830 Forest Lodge Dr, Houston Texas 77070, at no charge to the Company, which was renovated to provide a controlled environment for R&D and prototyping of our aeroponic system designs.
From September 18, 2012 through October 31, 2012, we completed an initial prototype system test by growing 110 basil plants. The test resulted in an average 1.7 lbs of basil per square foot in 30 days using under 2 gallons of water per plant drain to waste. Upon completion of the test, we made design changes to our lid system and nutrient dispensing system prototypes.
From March 8, 2013 through April 8, 2013, we completed a second prototype system test by growing 110 heads of leafy lettuce to include three types of lettuce, bibb lettuce, buttercrunch lettuce and romaine lettuce. The test resulted in an average head weight of 1/4 lbs in 28 days and water use of under 3 gallons per head drain to waste. Upon completion of the test, we made design changes to our lighting system, updated the framing system and put two prototype grow trays into vertical operation.
From July 13, 2013 through August 22, 2013, we completed a third prototype system test by growing 220 heads of leafy lettuce to include four types of lettuce, bibb lettuce, buttercrunch lettuce, romaine lettuce and ruby red lettuce. The test resulted in average head weight of 1/4 lbs in 30 days and 1/2 lbs in 40 days. During this period the Company also conducted research and development of lighting and controls, comparing the performance of LED lighting and T5 fluorescent lighting. Also during this period the Company tested its second nutrient dispensing prototype running two vertically stacked grow trays simultaneously.
In January 2015, we began construction of a controlled environment testing facility. The facility will be used to test production yields for a variety of cultivars using both our aeroponic and vertical farm framing designs. This data will then be used to develop business plans and marketing materials for our product and services. As of the date of this report, we had completed the walls and partitions, area drainage and flooring. We expect to begin installing the ventilation, climate controls and research platforms in the second quarter of 2015.
From February 19 through March 7, 2015, the Company completed installation of three mobile research labs at Tweed's Smith Falls Canada location per a Cannabis Production Pilot Agreement between the two Companies. The research will record the growth rate, phytocannabinoid production, water usage, fertilizer usage and labor of producing cannabis using aeroponic methods. We expect initial data from the research in September, 2015 which we will use towards developing a cannabis specific cultivation platform using aeroponic technology.
On April 20, 2015, we began our test pilot at Tweed's facility in Smith Falls, Ontario, by growing a sativa dominate strain from clone in order to collect certain production data. As of the date of this report, the first aeroponic pilot has concluded and we are expecting the production data in September, 2015. We conducted a control test using a coco, drip irrigation production method. The tests were staggered by approximately four weeks. The comparative results between the control and aeroponic system test will be published on or before September 30, 2015.
Plan of Expanded Operations
Our plan of expanded operations for the next 12 months, assuming we secure the necessary funding, are set forth in "Plan of Operations" in SEC filings incorporated by reference. The Company's long-term strategy is to direct sale, license and franchise their patented technologies and methods.
Potential Customers
We believe, based on our own formal and informal research that our products appeal to three distinct markets. Those markets include horticulture enthusiasts, commercial growers and horticulture researchers who are currently using areoponics or other indoor growing technologies. We intend to market our products to these markets simultaneously. The following is a description of these markets.
Horticulture Enthusiasts - The horticulture enthusiast consists of hobbyists, gardeners and those individuals seeking to utilize advanced horticulture technologies to grow at home, indoors in urban city environments where land availability is limited. We believe that our indoor aeroponic products offer both expert and novice horticulture enthusiasts several major benefits not readily available through traditional gardening methods. The Indoor Harvest™ system provides the user the ability to aeroponically grow fresh herbs, leafy greens, micro-greens, vegetables and medicinal plants year-round, regardless of seasonal weather conditions.
Commercial Growers - Commercial agriculture is beginning to migrate to CEA and BIA. We believe that our aeroponic products provide an affordable vertical farming solution for urban commercial growers who produce for local restaurants, hotels, wholesale and retail markets. Our systems can also be used in re-forestation projects or other revitalization projects through the system's ability to clone and propagate a variety of plant cuttings and hardwood cuttings.
Horticulture Researchers - The modular nature of our system design allows for numerous configurations from the same system. Our platform provides a variety of aeroponic delivery methods and plant support structures from the same system. This provides maximum flexibility to researchers who are experimenting with different plant species and are attempting to keep costs down.
We believe that cannabis has the potential to be a large market for our equipment. We are currently developing products which could be specifically used in the production of cannabis under our agreement with Tweed in Canada, where cannabis is legal throughout the country. We will only directly enter that market outside the U.S. where cannabis is legal, such as in Canada, and in the U.S. only in jurisdictions where cannabis is legal and only then if we do not believe there is any material likelihood that we could be found in violation of federal law in the U. S. through the sale of our products. See "Government Regulation and Certification," below.
Design Build and Management Services
In addition to selling aeroponic and vertical farm framing systems, in the future we also expect to offer design build services to commercial operators who are seeking consulting, custom equipment design, and project management of CEA and BIA construction projects. The Company will act as a general contractor by providing project management in connection with the sub-contracted work of mechanical, electrical and general construction contractors who will install our fixtures for client companies. The Company will identify sub-contractors based on project location and responses to solicitations for bid on projects the Company will manage. We currently have no contracts, agreements or commitments for any subcontractors.
Marketing
The Company intends to offer its products to retail markets through distributors or retailers as well as offering direct commercial sales from our website. As of the date of this filing, we have one oral or written agreements with distributors or retailers.
We are currently developing our marketing plan, which may include some or all of the following marketing methods:
Direct Mail - The use of direct mail allows us to reach a wide audience within a targeted market. A direct mail campaign may consist of a letter of introduction and a brochure featuring the products and services provided by the Company.
Internet Marketing - The Company intends to utilize social networks such as YouTube and Facebook as well as reaching out to industry bloggers and news sites in order to reach potential customers. The Company can also sponsor, or advertise with hydroponic and other related horticulture online forums, social networks and online magazines. The Company, in the future, plans to offer its products for sale via the internet. The Company has not launched its online sales as of the date of this report.
The Company intends to launch a social media network under the domain name aerofarmer.com. The Company intends to host forums, articles and blogs related specifically to aeroponic indoor farming while also offering a retail sales point for its products and services.
Trade Shows and Special Events - The Company intends to participate in industry trade shows and events in order to create market awareness for its brand of aeroponic fixtures and systems.
We intend to market our products to customers desiring to grow all varieties of agricultural products. We do not intend to exclude the growers of any agricultural products, including cannabis, from our marketing efforts. As of the date of this report, we are developing fixtures specifically for cannabis production in Canada under our agreement with Tweed. All of our current fixtures can be adapted for use by cannabis growers. In the future we may develop additional fixtures, or be contracted to design additional systems, specifically for cannabis production. Marketing our products in the U.S. in state and local jurisdictions where marijuana is legal is still uncertain due to the uncertain legal status of the growth, sale and use of cannabis due to conflicting laws under which what is illegal federally is to varying extents legal under certain state laws to the contrary [and even greater uncertainty as to what would constitute ancillary illegal activities such as aiding or abetting if any such direct actions are deemed illegal; and even if direct illegality laws were enforced, whether any ancillary related laws such as aiding and abetting would, if ever, be enforced]. We believe that if the cannabis industry were to become fully legal under both U.S. federal and state law, then this industry may well be where the most advances in technology related to our products could come from. Even our current marketing efforts reflect these uncertainties as, for example, although we are members of the National Cannabis Industry Association, as part of our broader-based marketing efforts, we are also currently members of the Association of Vertical Farming, a non-cannabis organization, focused on food production, and are collaborating with the Massachusetts Institute of Technology's Media Lab project on advancing agricultural food technology under the MITCityFarm project, as well. We are also working on developing cannabis-specific products in Canada under our agreement with Tweed. Thus, it is not unreasonable, but is not certain, to assume that the cannabis industry will become the biggest market for the type of equipment that we manufacture.
The Offering
Shares of common stock outstanding prior to this offering
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10,585,048
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