Bright Star Scientific Hemp Gobbler

Min. Invest
$25,000
Target Hold
24 mo
Annualized Returns
20%
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NDA AND RISK WARNINGS

NDA Language

By continuing to view this presentation beyond this point, you are acknowledging your agreement and consent that the materials contained herein are confidential and proprietary to Bright Star Scientific, LLC, and further consent to strict adherence to our Confidentiality Policy, which is available upon request. You further agree that failure to request this policy, including copies of any corporate NDAs does not absolve you from your agreement to be bound to/by its terms. You hereby acknowledge that any violation will result in damage to Bright Star Scientific, LLC, and consent to our pursuit of remedy and/or relief in law and/or equity including injunctive relief and punitive damages.

RISK LANGUAGE

Information contained herein is in “as is” form and is intended to be merely summary in nature and should not be construed as complete. Bright Star Scientific, LLC disclaims any and all representations or warranties, including any implied warranties for fitness for a particular purpose. The information contained herein, including any reference to financial information should not be considered advice or recommendations to lenders. Lenders and potential lenders should make an independent evaluation of any and all information such investor deems necessary prior to committing to any investment. This may contain forward looking statements including statements regarding our intent, belief or current expectations with respect to business practices, market conditions, operations or economic forecasts. Readers should not place undue reliance on these forward-looking statements. Past performance metrics noted are not guarantees of future results. Actual results of any investment may vary in significant or material positive or negative ways. Private placement investments are NOT bank deposits (thus NOT insured by the FDIC or by any other federal governmental agency) and are NOT guaranteed by Bright Star Scientific Supply LLC, and MAY lose value. Neither the Securities and Exchange Commission nor any federal or state securities commission or regulatory authority has recommended or approved any loan or investment or the accuracy or completeness of any of the information or materials provided by or through the website. Lenders must be able to afford the loss of their entire Loan. Any offerings or investments hereunder are being offered under SEC Regulation D, 506c. This website is intended solely for the use of accredited investors only.

Investment Type Debt
Term 24 Months
Raise Amount $2,750,000

Executive Summary

Bright Star Scientific LLC is raising funds to purchase a biomass processing machine and open a processing facility. Industrial Hemp is used to produce valuable products that are legal to sell to the general public, when they have less than 0.3% Tetrahydrocannabinol (THC). Those products, including Cannabidiol (CBD), Cannabigerol (CBG) and several others, are very valuable in the marketplace.  We will start with CBD  and CBG in phase one, pay off all lenders, and then purchase the unit processing machines to create carbon related products in phase two. The machine, The Hemp Gobbler, is a low cost, easy to operate, patent-pending “Swiss Army Knife Type” BioMass Modular Processing System. It has been designed and tested and will be used for the conversion of approximately two tons per day.

Cannabidiol, or CBD, has been identified as useful for creating a healthy human body.  Overwhelming official and anecdotal evidence has proven that many Cannabinoids have a positive effect on people and animals. CBD oil has been quickly incorporated into many over-the-counter consumer products and has experienced a remarkable growth to date.  The CBD product market started just a few short years ago and is developing quickly; it is at an early stage.

The production facility will consist of an 8’ X 40’ portable Hemp Gobbler mounted on skids and carried by a flat-bed trailer. Additional processors will be added as needed and funded from revenues.

The system will be fabricated by a very established engineering firm based in Houston, TX called SepPro Systems (http://www.sepprosystems.com/).   The equipment will be delivered to the processing site approximately sixteen weeks from the order date. It is expected to be in service within 15 days after delivery and operating at capacity within the following 30 days.

The Hemp Gobbler is energy efficient and produces gas by-products which can be used during the process, thereby reducing utility costs and fossil fuel consumption.

The process does not use solvents such as ethanol, CO2, or any other. That fact means that there will automatically be at least 20%-30% more Cannabinoids harvested because solvents dissolve plant matter.  This green system is a pyrolysis machine, utilizing heat to vaporize the Cannabinoids and turning the stems and stalks to biochar. The gas that is released by the plant biomass in the process will be used to provide energy for the machine.

We have many options for sourcing biomass  as there are many producers.  However, we are building a seed to shelf system with three other farming and final manufacturers that will utilize the very best core competencies of each group. More details later.  This machine is an integral part of that plan.

Why Participate?

ECONOMICS OF THE DEAL ARE ATTRACTIVE FOR SOME LENDERS

  • Loans from Accredited Investors only
  • Simple Agreement for Future Equity (SAFE) alternative
  • 20% interest rate on your loaned amount
  • Fully amortized repayment over 24-month term with the opportunity for early redemption with full repayment of interest.
  • Annual debt service for this loan is covered 36 times by annual EBITDA lasting for a term of 2 years

PROPRIETARY HIGH-TECH SYSTEM CREATES HIGH VALUE OFFTAKE PRODUCTS

  • The Hemp Gobbler creates CBD and other high value by-products
  • The Hemp Gobbler creates a continuous flow of two separate products that are similar or superior to competitive products
  • Offtake products are experiencing increasing demand and substantial value
  • Active Letters of Intent for offtake are in place
  • Efficient operation with low overhead and labor costs for low cost of goods sold
  • Mobile units eliminate costs of real estate and buildings lowering production costs.  This allows us to service remote farming communities if we choose.

System Features

SUSTAINABLE COMPETITIVE ADVANTAGES Hemp Gobbler  102 Co2 Solvent CryoEthanol Hexane/Butane
No dangerous and flammable solvents YES NO NO NO
No dissolving of Cannabinoids YES NO NO NO
Approximately 99% recovery, not~ 80% YES NO NO NO
Stalk not wasted YES NO NO NO
Plant not wasted YES NO NO NO
One step separation of Cannabinoids YES NO NO NO
Low Operating Cost YES NO NO NO
Very Low Emissions YES NO NO NO
Remote or off grid capabilities YES MAYBE MAYBE MAYBE
Can handle whole hemp plants YES NO REASON NO REASON NO REASON
Produces High Purity CBD YES YES YES YES

Financial Details

Bright Star Scientific LLC is raising $2.75 million through debt financing which is offered to lenders with a 20% annual interest rate on a fully amortized 24-month loan with payments starting at the beginning of the month after the completion of funding. A Simple Agreement for Future Equity (SAFE) is also available. 

$1,130,000 will be used for the Hemp Gobbler and related machinery, and $1,454,225 will be used for startup and Operating Expenses, and materials to begin production.

The conservative projections are based on the following assumptions: 

  • Low cost feedstock will be acquired from several sources, namely other extractors who have low performing machinery and are done with the biomass. It usually goes to the landfill or is burned as agricultural waste. We know there is at least 1-3% CBD in the biomass that has been run once. There are also many farmers who are growing Hemp and have tonnage of biomass to sell inexpensively.
  • Two, 10-hour per day processing cycles from one Hemp Gobbler.
  • 4,000 lbs. of 2-10% CBD Hemp will be processed by the Hemp Gobbler per day.
  • The processing continues to a THC-free distillate state receiving 2,600 kilograms per month and sold for a conservative $1,000 per kilogram, starting August 2020. 
  • The remaining portion of by-products create an income stream from selling THC-free distillate of Cannabinol (CBN) and Cannabigerol (CBG) to pharmaceutical companies @ an averaged $5,000 per kg (not the market price of $20,000+ CBN per/kg).

Plans call for unit process development of other product streams to commence in early 2020 and to be market-ready before the end of 2020. Our goal is to have multiple Hemp Gobbler units across the nation.

The intersection of modern industrial machines and the emerging market of Industrial Hemp is manifested in the financial projections noted below.  

 

Pro-Forma (P&L) Year 1 Year 2 Year 3
Revenue $46,571,388 $63,289,824 $63,289,824
Expenses $2,419,640 $2,758,716 $2,758,716
EBITDA $44,151,748 $60,531,108 $60,531,108

Financial Uses

Hemp Gobbler $930,000
Machinery $200,000
Initial OpEx & COGS $1,475,889
Capital Formation $135,844

Market Overview

Background: 


Only once in a lifetime does a brand-new market appear.  The Cannabis and Hemp movements were borne out of pure common sense, advocacy, the utility of the feedstock, political pressures, tax revenues, and tired economic pressures. The Cannabis plant has seemingly burst onto the international stage after the United States federal government got a patent (#6,630,507) on Cannabis as a medicine. The molecule sets that can be created by this useful plant are very numerous. The immediate need is for funding. Vertical industrial services and products that surround Cannabinoid exploitation, grain and fiber and the myriad products they create, are the trillion-dollar play.

Cannabis and Hemp crops have been continuously bred and farmed for thousands of years because of their utility.  There are about 2,000 varieties of Cannabis plants and they segment themselves very cleanly into three categories - THC-rich, medical preparations, and Industrial Hemp, depending on the combination and concentration of Cannabinoids:

  • THC-rich varieties (over 0.3% legally) are called Adult Use, or Recreational. Many people believe that the medical preparations that have some ratio of THC present are the most effective. This Hemp Gobbler has nothing whatsoever to do with working with THC.
  • Cannabidiol, or CBD, has been identified as one of the Cannabinoids that has medical value for the Human body.  Overwhelming official and anecdotal evidence has proven that many Cannabinoids, and especially Cannabidiol, has a positive effect on people and animals. Each state, town, community, manufacturer, store, processor, farmer, genetics company, consumer and entrepreneur must examine exactly what that product, plant, field, greenhouse, is producing and testing at, when it comes to the cannabinoids.

Industrial Hemp is called that because farmers, processors and manufacturers take the non-THC plant down to its molecular level and sell it to industry.  Why would that be done, you ask? Because it is a very useful group of sets of molecules. Generally, you have flowers, seeds and stalk which has two parts the fiber bark called bast, and the woody inner part called hurd.  The seeds are highly nutritious and have a nutty flavor. The fiber part of the stalks have been used for millennia for ropes and textiles, and the hurd has been used for construction and building materials for thousands of years.  Modern uses include the intermediate materials for air and water filters, and composite materials for a myriad of high-tech products.

The liquid output from the Hemp Gobbler will be tested by independent laboratories prior to sale. Production will concentrate on not only Cannabidiol (CBD) but also other Cannabinoids such as Cannabigerol (CBG) and Cannabinol (CBN) which provide strong profit margins. These Cannabinoids are used in medical research, pharmaceutical and cosmetic industries and are in high demand. 

According to the Brightfield Group, U.S. CBD product sales are expected to increase from around a pedestrian $600 million in 2018 to $23.7 billion by 2023. For those of you keeping score at home, this is, indeed, a compound annual growth rate of more than 100% per year over a five-year stretch. This makes CBD a much faster-growing niche than Cannabis as a whole. https://www.fool.com/investing/2019/12/16/4-things-to-know-about-the-fdas-cbd-guidance.aspx

 

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CERTAIN INFORMATION REGARDING THIS OFFERING

THESE UNITS ARE BEING OFFERED WITHOUT REGISTRATION UNDER ANY FEDERAL OR STATE SECURITIES LAWS, BUT ARE BEING OFFERED UNDER AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND UNDER COMPARABLE EXEMPTIONS UNDER VARIOUS STATE SECURITIES LAWS. HOWEVER, THE SECURITIES AND EXCHANGE COMMISSION (“COMMISSION”) HAS NOT DETERMINED THAT THESE UNITS ARE EXEMPT FROM REGISTRATION. THESE UNITS HAVE NOT BEEN REVIEWED, APPROVED OR DISAPPROVED BY THE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY, ADEQUACY, COMPLETENESS OR MERITS OF THIS MEMORANDUM, AND ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL TO, OR A SOLICITATION OF AN OFFER TO BUY FROM, NOR SHALL ANY OF THE UNITS BE OFFERED OR SOLD TO, ANY PERSON IN ANY JURISDICTION IN WHICH SUCH AN OFFER, SOLICITATION, PURCHASE, OR SALE IS UNLAWFUL OR UNAUTHORIZED UNDER THE SECURITIES LAWS OF SUCH JURISDICTION.

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April 06 2020

Confidential Offering Memorandum: Bright Star Scientific LLC

PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO CONSTRUE ANY CONTENTS OF THIS OFFERING MEMORANDUM OR ANY PRIOR OR SUBSEQUENT COMMUNICATIONS, AS CONSTITUTING INVESTMENT, LEGAL OR TAX ADVICE; RATHER THEY SHOULD CONSULT THEIR OWN ADVISORS OR COUNSEL WITH THE CAPACITY TO ADVISE AND PROTECT THEIR INTEREST IN CONNECTION WITH ALL MATTERS CONCERNING THIS OFFERING MEMORANDUM.

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