Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
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Company Introduction
MARKET DATA
Symbol FESI Exchanges OTCPK Current Price $0.26 Price Target $1.20 Rating Speculative Buy Outstanding Shares 35.21 Million Market Cap. $9.16 Million Average 50-day Volume 183,929
Thousands
Freedom Environmental Services, Inc. 7395 Hoffner Avenue Orlando, Florida 32822 Tel.: 407-658-6100 Fax: 407-658-6002 Website: www.freedomservicesflorida.com E-mail: info@freedomservicesflorida.com
Freedom Environmental Services Inc. (FESI) provides infrastructure management services for municipal, industrial and commercial wastewater and storm-water system customers across central Florida. The Company provides operating and maintenance services for water treatment plants and sewage pumping stations; organics collection and disposition; and commercial plumbing and water system management. In addition, FESI offers programs that protect homeowners and residential building owners from environmental disasters by ensuring that their systems are in good working order and by anticipating and fixing problems before they occur. The Company’s Neighbors Protecting NeighborsTM program is a pre-paid residential protection plan for personal, communal and multi-family septic systems. FESI provides its customers with emergency, diagnostic, management and system maintenance services seven days a week, 24 hours a day. FESI has executed a letter of intent to purchase the central Florida market leader in waste processing and infrastructure reconstruction. The company it plans to acquire has been in business for three generations and currently generates $10 million in annual revenues. In addition, the business is well positioned to grow exponentially because of a recent 300% increase in permitted grease and waste processing capacity to 450,000 gallons per day. The acquisition should close late in the fourth quarter of 2008. FESI also plans to develop applications for wastewater and waste by-products by building commercial plants to convert these feed-
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
stocks into biofuels and fertilizers. The Company’s goal is to produce 20 million to 30 million gallons of biofuel in 2009. FESI has developed a “Vertical Collection and Service” model that focuses on collecting wastewater products from commercial and residential customers and utilizing these substances to produce biofuels. In late September 2008, FESI formed a joint venture with a biofuel company with 30 million gallons per year of processing capacity. The joint venture will also include a wholly owned grease collection operation that currently has more than 1,200 active grease customer accounts and can provide the feedstock for fuel production. In addition, FESI has secured contracts for liquid waste collection with McDonald’s franchisees located in the Orlando (central Florida) area, an important first step in establishing a reliable feedstock platform for biofuel production.
Investment Highlights Strong outlook for wastewater treatment equipment market The population of the U.S. is estimated to reach 420 million by mid-2050. This growth will put enormous strain on existing water resources and strengthen demand for water recycling and reuse systems. There are more than 50,000 community water systems and more than 16,000 wastewater systems in the U.S. Equipment that was installed following the Clean Water Act in 1972 is coming to the end of its useful lifecycle and there is an urgent need to upgrade and retrofit wastewater treatment equipment. Sales opportunities abound for manufacturers who can provide energy-efficient, reduced-footprint equipment upgrades that, not only replace non-functional or older equipment, but also bring the end-user into compliance with stricter regulations governing wastewater treatment. The U.S. EPA estimates $202.5 billion in spending will be needed to control wastewater pollution for up to a 20year period1. This amount includes $134.4 billion for wastewater treatment and collection systems, $54.8 billion for combined sewer overflow corrections, and $9.0 billion for storm-water management. Small communities have documented needs of approximately $17.0 billion2. Growth through acquisitions in the wastewater services market FESI plans to establish a series of organic collection system platforms within regional and super-regional metropolitan areas by acquiring market leading operators. Utilizing this business model, FESI will build facilities in the Southeast and nationwide that can produce high grade fuel and bio-organic nutrient products from commercial, industrial and residential waste feedstock. The plan is to collect raw waste (grease and septage) from customers, which will provide the raw material for biofuel, transport the raw materials to a Company processing facility where waste convertible into biofuel would be separated from unusable waste, and convert the feedstock into biofuel.
1. http://enewsusa.blogspot.com/2008/01/2025-billion-needed-for-wastewater.html 2. www.epa.gov/owm/mtb/cwns/2004rtc/toc.htm
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Integrating waste-to-energy operations will provide cost advantages In September 2008, FESI announced plans to acquire a biofuel producer with operations in Florida and Pennsylvania. The current combined capacity of its processing plants is 30 million gallons per year. With fuel prices at current levels, revenues from fuel production at the acquired plants could approach $100 million annually. This transaction will also give FESI an integrated production platform from raw materials collection through the manufacture of market-ready fuel. Developing this integrated platform and building an consistent, reliable grease feedstock supply will provide FESI with a pricing advantage over other biofuel producers. Acquisition adds $10 million to annual revenues In October 2008, FESI executed a letter of intent to acquire the central Florida market leader in waste processing and infrastructure reconstruction. The acquisition, expected to close in the fourth quarter of 2008, will provide FESI with $10 million in additional revenues for 2009 and processing capacity of 450,000 gallons per day. This acquisition will also give FESI a market leading grease collection platform to feed biofuel production in excess of 20 million gallons per year. Neighbors protecting NeighborsTM Program The Company has developed an innovative Neighbors protecting NeighborsTM pre-paid residential protection program that monitors and maintains personal, communal and multi-family septic systems. The program helps prevent the spread of disease in communities and protects water resources by effectively removing nitrogen, phosphorus, and disease-causing bacteria, viruses and other typical pollutants from the water supply. The program will be offered through consumer and commercial direct sales channels at prices ranging from $795 to $1,695 for two- or three-year coverage. Financing may also be made available. FESI anticipates signing 2.5% of the 1.5 million households in the Orlando-Tampa market to this program.
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Business model The Company has developed a two-pronged business model focusing on both wastewater services and biofuel production from waste by-products. FESI provides turnkey system management services for commercial, industrial and municipal, wastewater, storm-water and water systems across central Florida. The Company’s water and wastewater treatment services include planning, evaluation, design, construction, inspection, operation and troubleshooting for a complete range of industrial and municipal wastewater treatment requirements. It brings sub-par systems into compliance with industrial effluent discharge standards. FESI also offers grease and organics collection and disposition, commercial plumbing, sewer and drain systems construction and lift station installation. The Company recently executed a letter of intent to acquire a $10 million in sales waste processing and environmental services company in Florida. FESI also offers Neighbors protecting NeighborsTM, a pre-paid residential protection program for monitoring and maintaining personal, communal and multi-family septic systems. The program helps communities halt the spread of disease and protects water resources by effectively removing typical pollutants such as nitrogen, phosphorus, and disease-causing bacteria and viruses from the system. Another key reason for regular septic system maintenance is to save money by avoiding expensive repairs or replacement of systems. The program will be offered through consumer and commercial direct sales channels at prices ranging from $795 to $1,695 for two or three years of coverage. FESI’s goal is to cover 2.5% of the 1.5 million households in the Orlando-Tampa region through this program. The second part of the Company`s business model involves establishing wastewater treatment/biofuel facilities that will produce fuels and natural bio-organic products (such as fertilizer) from waste by-products. FESI is developing a process for treating and harvesting nutrients such as phosphorus and ammonia from city wastewater treatment plants. The system filters out the wastewater and treats and bakes the sludge so the final product will be crumbly, dry fertilizer that can be bagged and sold to gardeners. FESI plans to establish a series of organic collection systems within regional and super-regional metropolitan areas by acquiring market leading operators as platforms. The Company then plans to build regional facilities in the Southeast and nationwide that will produce high grade fuel and bio-organic nutrient products from commercial, industrial and residential waste feedstock. This business will involve: • Collecting raw waste (grease and septage) from customers which would constitute the raw material of biofuel; • Transporting the raw materials to a processing facility controlled by the enterprise where waste convertible into biofuel would be separated from unusable waste; and • Converting the feedstock into biofuel. As a first step toward its goal, the Company plans to acquire a biofuel producer with operations in Florida and Pennsylvania. The current combined capacity of its processing plants is 30 million gallons per year. Additionally, the venture will include a wholly owned grease collection operation that currently has in excess of 1,200 active grease Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
customer accounts, providing the critical raw material for fuel production and enabling FESI to immediately expand grease collection service sales efforts. Corporate strategy The Company`s strategy is to expand its position in wastewater treatment, establish a biofuel production business and vertically integrate its operations for improved efficiencies, reduced costs and a high quality customer experience. FESI`s goals include the achievement of: • • • • • • • •
Organizational capability and flexibility; New revenues from acquisitions, organic growth and rate increases; High quality customer base; Excellent customer service; Stable and efficient concession framework; High productivity of assets through economies of scale; Effective and professional working relationship with regulators; and Financial strength and ability to raise financing at competitive costs;
The Company plans to implement an aggressive acquisition strategy, acquiring operating companies in the wastewater services sector and developing processes and facilities for converting the collected waste into fuel and organic nutrients. By supplying its acquired biofuel production facilities with grease feedstock secured through Company-owned waste hauling operations, FESI expects to significantly reduce operating costs and enhance profitability through economies of scale. In addition, the implementation of professional management, lower raw material costs, and centralized administration and financial operations will reduce operating costs for the acquired business and enhance overall profitability.
Services Wastewater and storm-water system management FESI’s existing business is commercial, industrial and municipal wastewater and storm-water infrastructure management. The Company’s wastewater and drainage infrastructure protection plans cover costs for all parts and services for: lift station repair and reconstruction, storm-water drainage and retention pond systems. FESI can clean, correct, rebuild and maintain storm-water system up to original, as-built plan specifications. Grease and organics collection and disposition For commercial and industrial businesses and restaurant owners, FESI offers complete grease and organics management programs. As required by municipal codes, grease is pumped out and disposed of safely and legally. The Company provides scheduled pumping and service programs that include grease trap maintenance to assure compliance. This provides feedstock for biofuel production. Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Commercial plumbing and water system management The Company provides commercial, industrial and institutional plumbing and water systems services to a wide variety of regional customers. From 24-hour emergency service to complete commercial and industrial re-piping, FESI executes complicated jobs quickly and cost-effectively. FESI’s services include: • complete plumbing and commercial septic services; • consultation of the use of a tertiary treatment system in place of a conventional septic tank system; • grease pumping and manifest programs; • lift station installation and maintenance; • investigations to provide subsurface conditions and percolation rates; • sewer and drain systems construction and maintenance; • investigations and evaluations of existing sewage systems; • storm and sanitary line cleaning; • storm systems installation; • video inspections; and • drainfield services.
Industry Outlook Wastewater management Approximately one-fourth of U.S. homes use septic systems; more than 4 billion gallons of wastewater is dispersed below ground every day3. The typical single-family home uses almost 70 gallons of water per person per day. In the United States there presently exist more than 50,000 community water systems and more than 16,000 wastewater systems4. Municipal governments own most water and wastewater systems. The U.S. EPA estimates that $202.5 billion in capital investment will be needed to control wastewater pollution over the next 20 years5. This amount includes $134.4 billion for wastewater treatment and collection systems, $54.8 billion for combined sewer overflow corrections, and $9.0 billion for storm-water management. Small communities have documented needs of approximately $17.0 billion6. The nation’s largest wastewater treatment systems, in New York and California, require $20 billion in spending for upgrades and maintenance. Florida, Illinois and Ohio each require upgrades costing in excess of $10 billion. The largest storm-water management program spending requirements are in Texas, Florida, Arizona and Minnesota, each with spending requirements of more than $0.9 billion.
3. www.epa.gov/owm/septic/pubs/homeowner_guide_long.pdf 4. http://ir.aquaamerica.com/downloads/Investor_Presentation.pdf 5. http://enewsusa.blogspot.com/2008/01/2025-billion-needed-for-wastewater.html 6. www.epa.gov/owm/mtb/cwns/2004rtc/toc.htm
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
EPA’s Estimate of the National Need for Water Infrastructure Investment, $bn
Source: www.epa.gov/owm/mtb/cwns/2004rtc/toc.htm
According to the World Water Council reports, residential water consumption will increase by 100% and industrial utilization by at least 33% by 20257. There is a nationwide need for better pollution prevention measures. Numerous processes can be used to clean up wastewaters, depending on the type and extent of contamination. Treated wastewater can be reused as drinking water (Singapore), in industry (cooling towers), in artificial recharge of aquifers, in agriculture (70% of Israel’s irrigated agriculture is based on highly purified wastewater) and in the rehabilitation of natural ecosystems (Florida Everglades)8. Biofuel market The rise in fossil fuel costs and heightened concern regarding environmental issues have led to increased interest in biofuels. Many countries are evaluating biofuel technologies as a source of affordable, more eco-friendly fuels. Unlike underground oil reserves, biofuels are a renewable resource since more crops can be grown to produce biofuel feedstocks. The world leaders in biofuel development and use are Brazil, the United States, France, Sweden and Germany. The value of the world biofuel market is expected to grow 12.3% annually through 2017. According to Clean Edge research, the global biofuels market will grow from $15.7 billion in 2005 to $52.5 billion by 2015. The worldwide ethanol market is expected to reach 27,000 million gallons by year-end 20149. U.S. ethanol production will dominate the global market followed by Brazil, the second largest ethanol producer. Production capacity is forecast to expand 6.5% annually through 2017. Worldwide biodiesel production is expected to grow 5% annually through 201710. The global biodiesel market is estimated to reach 37 billion gallons by 2016 and expand 42% annually11. 7. www.the-infoshop.com/study/fs30452-w-water-treatment.html 8. http://en.wikipedia.org/wiki/Wastewater 9. www.reportlinker.com/p089576/Global-Biofuel-Market-Analysis.html 10. www.prlog.org/10098635-biofuel-market-is-expected-to-rise-competently-in-india-due-to-high-energy-demand.html 11. www.fuji-keizai.com/e/report/biodiesel_e.html
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Ethanol focus The U.S. biofuels industry includes about 200 companies with combined annual revenues of about $3 billion12. This young industry is growing 25% to 50% each year. The United States produces mainly biodiesel (the largest user is the U.S. Army) and ethanol fuel. In 2007, U.S. ethanol production capacity soared by nearly 2 billion gallons to an annualized rate of more than 6.5 billion gallons, a 32% increase from the 4.9 billion gallons produced in 200613. Essentially, all the ethanol fuel in the U.S. is produced from corn, however, cellulosic ethanol is expected to boom during the period 2008-2017.
U.S. Fuel Ethanol Production, millions of gallons
Source: www.ethanolrfa.org/industry/statistics/
The U.S. industry grew from 50 biorefineries operating in 17 states in 1999 to 134 biorefineries operating in 26 states today. In 2008, an estimated 4 billion gallons of ethanol production capacity will come online from 68 biorefineries under construction or expanding. Once all of the new construction currently underway is complete, the U.S. ethanol industry will be able to supply more than 13 billion gallons of ethanol, representing nearly 10% of the nation’s gasoline demand. According to the Renewable Fuel Association, ethanol is already being blended into more than 50% of the gasoline sold in the U.S., the majority as E10 (a blend of 10% ethanol and 90% gasoline). It is blended in every gallon of gasoline sold in some areas of the country, including California, Minnesota, Missouri, Texas and along the Eastern Seaboard from Washington, D.C. to Boston. Ford, DaimlerChrysler and GM have begun producing “flexible-fuel” cars, trucks and minivans that can use gasoline and ethanol blends ranging from pure gasoline up to 85% ethanol (E85). By mid-2006, there were approximately 6 million E85-compatible vehicles on U.S. roads14.
12. www.marketresearch.com/product/display.asp?productid=1831874&SID=35994826-425808013-457468999 13. www.ethanolrfa.org/objects/pdf/outlook/RFA_Outlook_2008.pdf 14. http://images1.americanprogress.org/il80web20037/americanenergynow/AmericanEnergy.pdf
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Biodiesel focus Although Europe currently represents 90% of global biodiesel consumption and production, the U.S. is now ramping up production at a faster rate than Europe. Moreover, the U.S. is the world’s fastest growing biodiesel market. The emerging U.S. biodiesel market is estimated to have grown from 25 million gallons in 2004 to 250 million gallons in 2006. At year-end 2007, biodiesel production was estimated to have nearly doubled from the prior year to more than 450 billion gallons. Total U.S. biodiesel sales amounted to 1% of all petro-diesel on-road consumption in 2006. Estimated US Biodiesel Production, millions of gallons
Source: www.biodiesel.org/pdf_files/fuelfactsheets/Production_Graph_Slide.pdf
There are presently 171 companies that have together invested billions of dollars into the development of biodiesel manufacturing plants and are actively marketing biodiesel. Annual production capacity from these plants is 2.24 billion gallons. Sixty companies have reported plants currently under construction and scheduled to be completed within the next 12-18 months. An additional three plants are expanding their existing operations. Their combined capacity, if realized, would result in another 1.23 billion gallons per year of biodiesel production15.
Financial Outlook and valuation Outlook The Company commenced operations in 2008 and reported revenue of $202,549 in the first six months of 2008.
15. www.biodiesel.org/pdf_files/fuelfactsheets/Production_Capacity.pdf
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Income Statement, $ H1 2008 Revenue Cost of sales Gross profit Selling general and administrative expenses Operating income Other income and expenses Net loss Diluted EPS
202,549 167,711 34,838 263,061 -228,223 -11,183 -239,406 -0.0104
Source: www.pinksheets.com
Going forward, the Company plans to acquire operating companies in the wastewater services sector and develop commercial applications for converting collected waste products into energy and organic nutrients (fertilizer). However, FESI will require significant external financing to implement its growth through acquisition strategy. Historically, FESI’s sources of liquidity have been revenues from operations, loans from senior officers and bank lines of credit. To raise additional capital from acquisitions, the Company may sell stock or incur additional debt. In the second half of 2008, FESI announced two agreements that are likely to provide increasing revenue streams and visibility. The first involves an agreement to acquire a biofuels producer with operations in Florida and Pennsylvania. The current combined capacity of its processing plants is 30 million gallons per year. The deal includes a wholly owned grease collection operation with more than 1,200 active grease customer accounts, providing the necessary raw material for future biofuel production. With fuel prices at current levels, revenues from production of the acquired plants could approach $100 million. This transaction will also give FESI a robust vertically integrated platform from raw materials collection through the manufacture of market-ready fuel. The addition of more than 1,200 new customer accounts will also have an immediate, positive impact on Company’s sales while also providing feedstock for biofuel production. FESI anticipates cost advantages over other biofuel producers because of its reliable, ongoing grease feedstock supply. In October 2008, FESI announced a letter of intent to acquire a Florida market leader in waste processing and infrastructure reconstruction. This acquisition should close in the fourth quarter of 2008. The acquired company generates $10 million in yearly revenues, has been in business for three generations, and is positioned to grow exponentially with a recent 300% increase in permitted grease and waste processing capacity to 450,000 gallons per day. Additionally, it has a significant number of profitable municipal and commercial infrastructure and waste hauling contracts. This acquisition will add $10 million to FESI’s annualized revenues as well as processing capacity of 450,000 gallons per day. In addition, FESI will have a market leading grease collection platform to feed biofuel production in excess of 20 million gallons per year. Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
As a result of these agreements, we expect the Company to generate revenues approaching $27 million in 2009 and produce triple-digit annual revenue growth over the next three years. Assuming 24% gross margins and corporate expenses of approximately $1.2 million next year, we further anticipate FESI will be profitable in 2009, producing operating earnings in a $5.0 million range. In addition, we expect earnings growth to exceed revenue growth over the next three to five years as the Company benefits from operating synergies and economies of scale on its expanding revenue base. Projected Revenue $ in millions
Source: Analyst estimates
Valuation For valuation purposes, we compared FESI with other companies that provide wastewater and solid waste treatment solutions and services in the U.S. The peer group companies currently trade at forward Price/Sales multiples of around 0.93 times sales and at forward Price/Earnings multiples of 13 times earnings. We believe FESI should trade at a superior Price/Sales multiple given its vertical integration strategy and robust growth outlook. Comparative analysis Company Name 31-Oct-08
Ticker Symbol
Republic Services Inc. Allied Waste Industries Inc. Casella Waste Systems Inc. Clean Harbors Inc. Veolia Environnement SA Waste Management Inc. Peers Median
RSG AW CWST CLHB VE WMI
Price per Mrkt. Cap. Share, $ $ Mn 24.09 10.65 5.09 65.60 25.07 31.90
4380 4,630 130 1,540 11,470 15,650
P/E
P/S
2008
2009
2008
2009
13.38 10.76 28.28 25.13 8.80 14.05 13.72
12.88 10.14 14.97 22.16 7.83 13.13 13.00
1.35 0.74 0.21 1.47 0.23 1.15 0.95
1.34 0.73 0.21 1.38 0.21 1.14 0.93
Source: Yahoo Finance
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
We value the Company at a two times forward Price/Sales multiple and a market value target of approximately $53.6 million. Assuming equity sales resulting in 45 million fully diluted shares outstanding by year-end 2009, we derive a $1.20 price target. As a result, we are initiating coverage of FESI with a Speculative Buy rating and a $1.20 price target. However, we strongly advise investors to consider the risk factors mentioned below since the Company faces many challenges in achieving its revenue growth goals.
Risk Factors Limited operating history The Company entered in a new line of business in June 2008. Although FESI is working on the development and expansion of its wastewater and storm-water system management services, there is no assurance that the Company will be able to build a viable business and generate positive cash flows. The Company’s limited operating history and early development stage make forecasting future revenues difficult. Environmental regulations FESI’s operations are subject to various federal, state and local environmental, safety and health laws and regulations including: licensing, permitting and inspection requirements applicable to waste processing and environmental services. In addition, the Company is subject to comprehensive federal and state regulatory guidelines, including the federal Clean Water Act, Clean Air Act, Resource Conservation and Recovery Act, Emergency Planning and Community Right-to-Know Act, Toxic Substances Control Act and their state analogs. Noncompliance with liabilities under environmental laws and regulations could result in substantial costs incurred, including capital expenditures for equipment upgrades, operational changes, fines and penalties and third-party claims for damages. Additional capital required to continue operations To implement its business plan and sustain its operations during a growth period, the Company will be required to issue additional equity or debt financing. There is no assurance that adequate funding, whether through equity or debt financing or other sources, will be available when needed or on terms acceptable to the Company. If FESI fails to obtain sufficient funds, implementation of its business plan could be delayed. Volatility of biofuel prices As a part of its business strategy, FESI plans to develop and produce biofuels derived from waste and by-products. As such, the Company`s profits will in part be determined by biofuel prices. These prices fluctuate widely and are affected by numerous factors beyond the Company’s control. On a positive note, the Company will be using grease rather than oil extracted from plants as a feedstock and will thus not be effected by volatile commodity prices.
Freedom Environmental Services, Inc. (OTCPK: FESI)
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Management Michael S. Borish Chairman of the Board of Directors,Chief Executive Officer
Mr. Borish has served as the Company’s chairman and CEO since June 2008. From December, 2007 to June 2008, he served as managing member of Freedom Environmental Services LLC, the Company’s wholly owned operating subsidiary. Prior to FESI, Mr. Borish served as president of Resort Marketing Professionals.
Edmund F. Curtis Director, President, Chief Operating Officer
Mr. Curtis joined the Company in June 2008 and serves as FESI’s president and COO. Prior to FESI, from 2004 to 2008, Mr. Curtis was self-employed as a consultant, providing assistance to companies in matters related to corporate restructuring. From 1997 to 2004, he served as senior vice president for Trendwest Resorts (Division of Cendant Corporation) with P&L responsibility of $500 million and as a vice president of Hilton Hotels Corporation. Mr. Curtis holds a Bachelor of Science degree in Finance from the University of Vermont.
John Holwell Director, Vice President
Mr. Holwell has served as the Company’s vice president since June 2008. From 2003 to 2007, Mr. Holwell served as general manager of Brownie’s Water Solutions, a plumbing and septic services company.
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Analyst: Victor Sula, Ph.D. Initial Report November 3rd, 2008
Disclaimer DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. The information contained in our report should be viewed as commercial advertisement and is not intended to be investment advice. The report is not provided to any particular individual with a view toward their individual circumstances. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them. Our newsletter and website have been prepared for informational purposes only and are not intended to be used as a complete source of information on any particular company. An individual should never invest in the securities of any of the companies profiled based solely on information contained in our report. Individuals should assume that all information contained in the report about profiled companies is not trustworthy unless verified by their own independent research. Any individual who chooses to invest in any securities should do so with caution. Investing in securities is speculative and carries a high degree of risk; you may lose some or all of the money that is invested. Always research your own investments and consult with a registered investment advisor or licensed stock broker before investing. The report is a service of BlueWave Advisors, LLC, a financial public relations firm that has been compensated by the companies profiled. All direct and third party compensation received has been disclosed within each individual profile in accordance with section 17(b) of the Securities Act of 1933. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled companies. BlueWave Advisors, LLC, and/or its affiliated will hold, buy, and sell securities in the companies profiled. When compensated in shares, all readers should be aware that is our policy to liquidate all shares immediately. We reserve the right to buy or sell the shares of any the companies mentioned in any materials we produce at any time. This compensation constitutes a conflict of interest as to our ability to remain objective in our communication regarding the profiled companies. BeaconEquity.com is a Web site wholly-owned by BlueWave Advisors, LLC. BlueWave Advisors, LLC has been compensated two hundred thousand shares from Value Quest Inc., a shareholder of FESI, as a marketing budget to manage a comprehensive investor awareness program including the creation and distribution of this report as well as other investor relations efforts. Information contained in our report will contain “forward looking statements” as defined under Section 27A of the Securities Act of 1933 and Section 21B of the Securities Exchange Act of 1934. Subscribers are cautioned not to place undue reliance upon these forward looking statements. These forward looking statements are subject to a number of known and unknown risks and uncertainties outside of our control that could cause actual operations or results to differ materially from those anticipated. Factors that could affect performance include, but are not limited to, those factors that are discussed in each profiled company’s most recent reports or registration statements filed with the SEC. You should consider these factors in evaluating the forward looking statements included in the report and not place undue reliance upon such statements. We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or completeness of the information provided, including information regarding a profiled company’s plans or ability to effect any planned or proposed actions. We have no first-hand knowledge of any profiled company’s operations and therefore cannot comment on their capabilities, intent, resources, nor experience and we make no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company and related sources which we believe to be reliable. To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information provided in the report, or for any direct, indirect, consequential, incidental, special or punitive damages that may arise out of the use of information we provide to any person or entity (including, but not limited to, lost profits, loss of opportunities, trading losses, and damages that may result from any inaccuracy or incompleteness of this information). We encourage you to invest carefully and read investment information available at the websites of the SEC at http://www.sec.gov and FINRA at http://www. finra.org. All decisions are made solely by the analyst and independent of outside parties or influence. I, Victor Sula, Ph.D, the author of this report, certify that the material and views presented herein represent my personal opinion regarding the content and securities included in this report. In no way has my opinion been influenced by outside parties, nor has my compensation been either directly or indirectly tied to the performance of any security listed. I certify that I do not currently own, nor will own and shares or securities in any of the companies featured in this report. Victor Sula, Ph.D. - Senior Analyst Victor Sula, Ph.D. has held the position of Senior Analyst with several independent investment research firms since 2004. Prior to 2004, Mr. Sula held Senior Financial Consultant positions within the World Bank sponsored Agency for Restructuring and Enterprise Assistance and TACIS sponsored Center for Productivity and Competitiveness of Moldova, where he was involved in corporate reorganization and liquidation. He is also employed as Associate Professor at the Academy of Economic Studies of Moldova. Mr. Sula earned his Ph.D. degree in 2001 and bachelor’s degree in Finance in 1997 from the Academy of Economic Studies of Moldova. Mr. Sula is currently a level III candidate in the CFA program.
Freedom Environmental Services, Inc. (OTCPK: FESI)
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