united teak investment presentation - v.3.4

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Use your mouse to click anywhere to advance to the next discussion point or slide The following presentation includes various statistics pertaining to inflation, including selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security.

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United Teak Investment Presentation - May 20, 2009

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  • 1.The following presentation includes various statistics pertaining to inflation, including selling price indices and current market values. Please be advised that past inflationand selling price trends are no guarantee of futureperformance. Individuals should consult their own professional advisors to determine their financial needs.No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security. Use your mouse to click anywhere to advance to the nextdiscussion point or slide

2. The following presentation includes various statistics pertaining to inflation and selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security. Use your mouse to click anywhere to advance to the next discussion point or slide 3. What you should knowabout TeakTeak (also known as Tectona Grandis): Is a deciduous hardwood tree indigenous to the dry and hilly terrains of Indonesiaand Southeast Asia Remains one of the most valuable of all hardwoods and is known for itsbeauty, strength, durability and weather-resistant qualities Is the leading choice for marine and outdoor furniture applications because theextremely dense wood contains natural oils and rubber content, therebypossessing the greatest capability of any wood to withstand the effects of theharsh outdoor environment Can naturally endure the effects of sun, rain and even snow withoutrotting, warping, cracking, shrinkage or swelling Will naturally age to a beautiful silver-gray hew over the years or with a periodicapplication of natural teak oil will maintain its original color and richness for alifetime. Prices have increased 15% per annum between 2002 and 2007 with pricesincreasing by a staggering 67% in 2007 due to the supply deficit, according to theONF (Central American National Forestry Office) 4. What is the Project?A unique initiative designed to: Promote responsible and sustainable reforestation in an genuine effort to preservethe threatened tropical rainforest throughout the world, one of Earths mostprecious natural habitats While Providing individuals, businesses and institutions the opportunity to fortify theirfinancial futures through responsible and sustainable investingThe United Teak Reforestation Project was established in 2008 and is managed by the United Teak Management Group (UTMG) UTMG is a Panamanian registered privately held corporation founded on strongethical and visionary business principles, primarily focused toward reforestationdevelopment and management of sustainable teak plantations in the CentralAmerican country of The Republic of Panama UTMG has full and unencumbered authority to develop, market and manage allaspects of the United Teak Reforestation Project including the associatedassets, employees, equipment, land and trees 5. Project OverviewProject objectives Reduce deforestation of tropical rainforests by developing Teak treeplantations to fulfill growing global market demand for quality Teak wood End destructive environmental impact of historical practices by:- Reducing the need for harsh and destructive stripping of indigenous trees- Establishing sustainable Teak tree plantations on land previously cut and slashed for cattlegrazing to restore and contribute to the lush tropical canopy- Reduce and progressively reverse the environmental impact of the callous destruction of tropicalrainforests Project expansion achieved through sale of Teak trees Clients purchase a certified number of quality Teak trees per 1 hectare (2.5acre) parcel UTMG prepares the land, plants, maintains and harvests Teak trees onbehalf of the client Client receives harvest proceeds Project expansion achieved Allstakeholders benefit, including the precious global environment 6. Project MethodologyEliminate Cut and SlashUnited Teak acquires previously Cut and Slashed dormant fields and live-stock grazing land in ecologically sensitive areas of beautiful Panama 7. Project Methodology Preparation and PlantingFollowing hand clearing and cultivation of the land, high- quality Teak Seedlings are selected from certified growers and planted during the optimal rainy season 8. Project MethodologyProtection and Growth CycleThe skilled forestry team at UTMG ensures complete care and maintenance of the entire Teak plantation over the projected Twenty-year growth cycle18 Months 48 Months 9. Project Methodology Plantation ManagementUTMG manages all aspects of the Project through final harvest and ultimate sale of Client timber to selected Teak distributors, wholesalers and end-users 10. What You Are Buying?Trees guaranteed to grow With complete life cycle management Clients purchase and retain 1 hectare (2.5 acres) segregated Parcels of plantedand fully managed Teak trees with a guaranteed[1] minimum yield / number of treesat final harvest Typically, each parcel purchased is planted with approximately 1,100 quality Teakseedlings obtained through a recognized local Panamanian grower, although othervarious species of trees can be mutually agreed upon UTMG provides each client with: - Complete land preparation, planting, care and maintenance of Teak trees purchased throughout the entire growth cycle (Twenty-years for new seedlings) - Culling and preparation services (conversion to marketable timber) at final harvest - Sale of marketable timber in the wholesale Teak market on behalf of the client, obtaining fair and available wholesale pricing (or preparation for delivery to the client upon request) The Purchase Price is the only out of pocket cost to the client A one-time 12%fee is deducted from all timber sale proceeds to compensate thecutting, management and selling services provided by UTMG during the contract[1]If for any reason the clients segregated parcel of planted Teak trees does not produce the contracted yield at final harvest, UTMG will provide the difference from a reserve of privately owned Teak trees 11. Teak Tree Parcel Pricing Current cost of one United Teak Reforestation Parcel (1,100 trees atplanting with a guaranteed minimum yield of 240 Cubic Meters ofcommercial grade wood) is US$41,800 Investment discounts shall be provided for each United Teak purchase contract offive parcels or greater US$9,880Purchase SizeNo. of Trees Purchase PricePrice per Tree DiscountDown 1 Parcel1,100US$41,800 US$38.00 - US$1,680 a year for 5 Parcels5,500 US$198,550 US$36.105% 19 Years10 Parcels11,000 US$376,200 US$34.20 10% ** FOR A LIMITED TIME ONLY ** We are offering 0% interest and absolute no fee financing on the purchase of each United Teak Reforestation Parcel No qualification or credit check required 12. Securing Your InvestmentPurchases secured by Timber Deed Front Documentation Includes:- Number of treesBackpurchased / guaranteedat final harvest- Assignment to customerof complete andunencumbered ownershipof trees purchased- Location of trees (viaGPS coordinates)GPS Coordinates 13. Your Teak Parcel ValuationCalculated value of each United Teak Parcel One Parcel (1110 trees) of Teak will yield approximately 240 Cubic Meters ofcommercial wood within 20 years, utilizing an annualized conservative growth rateof 12 Cubic Meters per hectare A conservative average teak wholesale price estimate per cubic meter (424 boardfeet) is US$1,060.00, or US$2.50 per board foot (see chart)ITTO (1)reportedteak log prices as of October, 2005M yanm ar V eneer M yanm ar Saw M yanm ar SawU S Im port M easure(2 ) 2nd Q ual Q uality G r IQ uality G r II A verage 2005 E uro per H oppus Ton 3,866 1,914 1,5452,207 U S$ per C ubic M eter2,642 1,308 1,0561,508 U S $ per B oard Foot6.23 3.092.49 3.56Notes (1) Source International Tropical Timber Organization (www.itto.or.jp) (2) Price refers to plantation sawn wood, and includes small sizes The estimated conservative harvest value of a United Teak tree Parcel isUS$254,400 at TODAYS wholesale prices (US$1,060 x 240 = US$254,400) 14. Asset Value / ReturnsWhen you purchase one of ourReturn Example: certified Teak Parcels you areFull Parcel of New Seedlings actually paying only a fraction of the assets value at maturity, based upon Harvest value of full Parcel with currentwholesale prices!0% increase (1,100 trees) $254,400 Purchase Price (over 20 years) (41,800) This means the value of your initial treeGrowth appreciation at todayspurchase will increase 5 times faster than prices - Growth Value $212,600the cost, simply by growing We call thisGrowth Value Total Return 508% Multiple of cost 5 Xs When historical inflation trends are addedto Growth Value the return on your Teakpurchase increases to over 900%... OrFUTURE harvest value of fullmore than 9 times your total investmentParcel (1,100 trees)$433,200 Our conservative calculated returns do not Purchase Price (over 20 years) (41,800)take into account the value of you payingGrowth appreciation calculatedfor your investment over 20 years That is at conservative 3% increase $391,400an additional benefit and investment Total Return 936%security mechanism unparalleled in the Multiple of cost9Xsreforestation investment industry 15. Teak Price TrendsThe median wholesale price of Teak has increased an average of 5.5% per year since 1972 W h o le s a le T e a k P ric e (1)U S $ P e r C u b ic M e t e r$2,000(2)Natural Deforested TeakITTO FAO$1,000 (3)Plantation Teak $01972 198219922002 2012 Chart Notes(1)Source International Tropical Timber Organization (www.itto.or.jp), FAO (www.fao.org) and UTMG analysis(2)Drop in deforested Teak price is related to political situation in Myanmar and international deforestation laws(3)Plantation Teak prices steadily increased the last five years with projected long term annual growth of 5.5% to 7% 16. Teak Price FutureTeak prices are predicted to continually grow mainly due to increased global demand and a decreased supply of quality timber Increased global government restrictions placed on the cutting of natural growth forests has created a strong world demand for quality Teak timber. It is expected that the government will continue to restrict deforestation practices, eventually prohibiting all cutting of natural forests. This will surely increase the prices of plantation Teak timber The expected cubic meter value at each scheduled thinning / harvest has been calculated utilizing a moderate 3.0% annual increase in already conservative Teak timber prices The market trend since 1972 has averaged more than 5.5% Projected Teak Price Commercial ThinningCommercial Thinning Commercial ThinningCommercial Thinning Year 7Year 10 Year 14Year 20 $200 / M3$1,383 / M3$1,557 / M3$1,859 / M3 Notes(1) A current Teak timber price of US$1,060 M3 was utilized as a starting point for growth projections(2) Average annual Teak timber price growth rate of 3% was applied to harvest years 10 through 20(3) Due to reduced size and maturity of timber harvested in year 7, a conservative fixed value of US$200 M 3 was utilized 17. Teak Investment ReturnsShould historical price trends of Teak timber continue, the value of your United Teak investment is expected to greatly exceedthe appreciation of conventional global investments Applying a conservative 3.0% annual Teak timber price increase, your United Teakinvestment is projected to earn a 16.5% annualized compounded return Net!!Investment ProjectionAge ofTrees TreesHarvested Commercial Management Investment TreesStandingThinnedTimber [M3]Value Fees [12%] Net Value41,100 433 0$0 $0$07667 26722.6$5,391$647 $4,74410 400 13232.5 $44,970 $5,396 $39,57414 2688847.0 $73,102 $8,772 $64,33020 180 180 166.6$309,742$37,169$272,573Totals1,100268.7$433,205$51,985$381,220Notes(1) An average annual Teak timber price growth rate of 3% assumed, calculated utilizing the Projected Teak Price chart(2) The calculated 16.5% average annual compounded return does not take into account periodic harvest revenue payments 18. Comparing Teak toConventional InvestmentsWhen you compare anticipated appreciation in value to conventional investment alternativesTeak greatly exceeds the competitionCompounded annual return Last 32 years16.5%United Teak11,378% 7.4% U.S. Stock Market (DJ) 915%Over 113 TimesPurchase Price8.0% Stock Market (TSE) CND. 1,087%And if historyTotal Return %repeats3.1%Nikkei (Japan)258%after 32 years11 Times better5.0%U. S. T-Bills / Bonds 454% than the US Stock Market6.1% Gold Bullion627% 8.8%U.S. Real Estate 1,366%2,500% 5,000% 7,500% 10,000%12,500% 19. Primary InfluenceHow are these returns consistently achievable? Quick growing resource Ever-increasing demand Limited world supply 20. Teak Supply InfluencesTeak timber supplies are influenced and limited primarily due to the following global factors: Environmental requirements severely limit suitable growing regions: - Teak trees only grow adequately within 10 - 15 degrees of the equator - Growing region must be at the correct elevation with distinct wet and dry seasons - Only equatorial regions of Central / South America and Southeast Asia / Africa possess the essential temperature, humidity and rainfall characteristics Deforestation and destructive forestry continues to occur in many areas designated as suitable growth regions: - The 2001 State of the Worlds Forest Report published by the United Nations stated - While forest area in developed countries has stabilized and is slightly increasing overall, deforestation has continued in many developing countries Pressure from the United Nations and key governments forcing new legislation to prohibit the cutting of indigenous Teak trees Good quality plantation Teak requires sufficient care and maintenance in the early years in order to produce marketable timber 21. Teak DemandPlantation Teak is the investment of the future, but supply of good quality timber will be limited Demand for good quality Teak has never been higher due to its strength, hardnessand durability The high oil content of teak woodprovidesnatural resistance toinsects, fungus, fire, water and toxic acids Recognized globally as a quality construction material that will endure the test oftime, lasting for decades and even centuries Teak is an essential construction material in ship and yachtbuilding, joinery,flooring, decorativecarving, cabinetwork, paneling, turnery, specialty fixtures, tanks and vats Demand and new applications for Teak wood are ever increasing, while goodquality timber is decreasing at a rapid pace This dynamic assures ever-increasing prices for Teak wood! 22. Risk AssessmentWith such high returns What are the risks? Possible risks associated with Teak plantations: - Agricultural - Physical and Environmental - Government Regulations - Plantation Management - Time State of future markets - Impact of Inflation At United Teak We have carefully structured our timber investment packages to mitigate the primary risks associated with Teak plantations and to ensure your asset is safe and secure during the 20 year life-cycle 23. Agricultural Risks InsectsNo indigenous harmful pests. Onlyexposure is to roots within first year or ofplanting. Problem easily avoided by properpreparation and bio-sensitive insecticides Fungus / biological No known casesin Panama of mass fungus or biologicaldestruction. If present, fixed by implementing aneffective spraying program GrowthInferior growth usually results fromneglect, poor soil or unsuitable climateconditions. At United Teak we:- Select farms with only grade 1 soil conditionssituated in optimal growing regions- Our expert team of on-site foresters oversee allphases of the growth and management processincluding annual maintenance and fertilizationHigh motivation for continued proper management UTMG fees are based solely on quality of final harvest 24. Physical / Environmental Risks Hurricane and FloodsHurricanes are non-existent in the region. Trees / farms receive sufficient rainfall eight months of the year and excess flooding is easy managed by topography grading and properly planned irrigation Fire Forest fires highly unlikely in the tropics and the trees high oil content make them impervious to fire once they are a few years of age. Fire ditches are maintained during the dry season to reduce accidental fire risks Theft Logistically impossible as workers live onsite and work the plantation daily. UTMG staff and foresters provide regular oversight and inspection. Site is fully protected with a security fence with no hidden or concealed access points Unforeseen destruction and catastropheNone know to the regionUTMG guarantees your Teak saplings Should any trees within the first two years of planting not perform to industry standards, they will be replaced and replanted at our cost 25. Government and Legal RiskWhy is Panama ideal? Stable government with a democratic voting system and a legal structure based on globally recognized civil law Radical shift in historical governmental process highly unlikely - Widespread land ownership and voter participation in general elections - Viewed as one of brightest democratic success stories of the last century - Strategically important to the United States and regional stability A member of the Central American Free Trade Agreement (CAFTA) with United States - No indigenous military Making change by revolution unlikely - Progressive business environment with tax incentives, land ownership laws and rights encouraging plantation development - The Panama economy relies heavily on foreign investment, trade and tourism Panama possess the optimum political conditions for stable investment in Teak plantations - Although not indigenous to Panama, this tiny country provides a uniquely perfect geographical, climatic and geomorphologic condition for the production of high quality plantation Teak, and with some of the fastest growth rates of Teak in the world being recorded in Panama. [Teakwood Commercialization - 1998] 26. Management RiskHighly skilled and professional team assembled to manage your assets growth John Cornacchia United Teak Founder, Chairman of the Board - Passionate visionary with strong ethical business practices - Successful business owner and operations manager for over 22 years - Highly experienced in the dynamic global business market - Operating in Panama for over five years with a solid team on the ground Strong operations team United Teak Management Group - Chief Executive Officer, corporate insurance expert with over 20 years of experience in operating businesses in Canada - Chief Operation Officer with over 16 years experience in managing agriculture projects in Panama - A full time forester highly educated and experienced in soil rehabilitation and Teak plantations - Full time plantation site manager overseeing a team of various full time and seasonal plantation employees 27. Time Market RiskThe hardest risk to manage Unforeseen market conditions and changes Certain primary factors mitigate this risk, thereby reducing the negativeimpact on your investment: - Teak has always been in high demand and will remain desirable due to the unique properties and qualities it possesses - The quality of plantation Teak wood has greatly increased due to improved planting and maintenance practices, resulting in increased demand for the precious natural resource - Supply is becoming increasingly limited due to the high demand - Worldwide legislative trend toward rainforest preservation and laws prohibiting the cutting of indigenous Teak trees and other tropical species - Recent push to establish plantations in indigenous regions of Southeast Asia and India will not enter the market for many years after plantations in Panama are ready for harvest, due to the quick growing cycles in the regionThe best hedge against time and market risk Price leverage! 28. Time Market RiskHow price leverage can hedge against time and market risk: Your purchase price provides leverage of 5 to 1 (current harvest value vs. cost)providing outstanding risk protection The chart below depicts what would happen in the unlikely event that the futurevalue of Teak wood (relative to other goods and services) declines by 50%NormalZeroinflationinflation Todays wholesale yield value of one parcel$254,400 $254,400 Inflation rate (same as last 15 years) 3.0%ZERO Future wholesale value $433,200 $254,400 Less: 50% drop in market value($216,600) ($127,200) Harvest proceeds $216,600 $127,200 Total return (vs. $41,800 cost)418% 204% Multiple of cost 4 Xs2 Xs 29. Performance Guarantees Our Commitment to YouUnited Teak is built on sound and ethical business practices We guarantee our services United Teak guarantees that your Teak saplings will grow to industry standardsduring the first two crucial growing years: - Should any of your Teak saplings fail to grow properly within the first two years of initial planting, United Teak will purchase and replant them at our expense with no additional cost to you - Zero United Teak guarantees that you will be completely satisfied with the performanceof your Teak parcel investment So much so that we provide a five-year fullmoney-back policy: - In the unlikely event that you are not fully satisfied with your Teak parcel investment on the five year anniversary purchase date, United Teak will provide a full refund of every dollar paid under your contract, including 2.85% compounded annual interest. No questions and no cost to you - Zero United Teak guarantees that your parcel will deliver a minimum yield of 240 cubicmeters of commercial grade timber during the 20 year life-cycle: - Each of our Teak parcels are properly managed so that they produce 240 cubic meters of commercial grade timber during the 20 year life-cycle. Simply We will provide any shortfall that may possibly occur from our own reserves at no additional cost to you - Zero The United Teak guarantees represent our commitment to you 30. Taking ActionUnited Teak has assembled a highly specialized team of experts and programs to provide a highly unique opportunity If your financial goals include:- Highly lucrative, long-term investment programs- Mitigating risks associated with the volatile stock market- Diversifying your portfolio while investing globally in a renewable resource- The security of fully guaranteed asset ownership- Paying for your investment over the entire term of ownership AND- The opportunity to help protect the worlds precious environment Get involved with this exciting initiative and contact United Teaktoday Or visit our website at www.unitedteak.com 31. The following presentation includes various statistics pertaining to inflation and selling price indices and current market values. Please be advised that past inflation and selling price trends are no guarantee of future performance. Individuals should consult their own professional advisors to determine their financial needs. No information provided or opinion expressed in this presentation constitutes an offer to buy or sell any security. Use your mouse to click anywhere to advance to the next discussion point or slide