28 Apr A Borrower Success Story: Putting Past Accomplishments to Work to Make the World an Even Better Place
Two years ago, Pasadena Private Lending (PPL) was approached by a successful entrepreneur, Nicholas Canosa, through a well-known and respected intermediary. Nicholas had founded an advanced waste processing and recycling company and was seeking a loan to provide working capital for two technologically related spin off ventures. In addition to pledging the collateral of the new ventures, he pledged as additional collateral the stock of his original firm as part of providing PPL with a personal guaranty.
Braven Environmental, which Nicholas Canosa co-founded, is a leader in converting plastic waste into valuable second-life products, one of only a few companies that has proven its solution on a commercial scale. Through its proprietary Modular Pyrolysis Reactor (BRT™), Braven processes clean or contaminated waste plastics into PyChem™ (Braven’s trademarked brand of Pyrolysis Oil), a key building block for new plastic production. Braven had already raised $87MM with its most recent valuation at $650MM with Morgan Stanley actively raising an additional $250MM to support the construction of Braven’s first multi-unit commercial plant in Texarkana, TX to service a large multi-national food company.
Canosa is one of the largest individual shareholders in Braven due to his pivotal role in developing the key technical patents that the company holds. After stepping down from his management role to enable professional corporate managers to drive the business forward, he redirected his focus to an industrial problem that was developing in the southern United States. The problem was the disposal of organic waste from sawmills, forestry groups and consumer products companies all involved in some type of organic processing that generates large volumes of waste.
The hundreds of sawmills and food processing facilities throughout the US generate approximately one billion tons of waste wood chips and grindings. This waste type must otherwise be disposed of immediately for fear of auto-ignition (due to methane gas emissions). Capital in hand from PPL, Canosa designed, patented, fabricated and installed his first unit south of Atlanta, GA. It is the first carbonizing technology that processes all types and categories of organic waste, converting it to biochar while sequestering greenhouse gases.
His second firm, Good Earth, generates revenues from the sale of carbon-capturing biochar conversion machines, sale of carbon offsets awarded due to the carbon negative process Nicholas patented, and sale of specialized Activated Carbon used in a wide variety of companies like waste water treatment facilities, automotive manufactures, steel and cement companies (which all mix the renewable and sustainable carbon into their products), as well as US military use for filtering unknown gases during wartime efforts. And lastly, biochar and compost are extraordinarily valuable to farmers in lieu of damaging fertilizers.
At present, China creates most of the Activated Carbon and due to tariffs and very long logistics (compounded by war efforts), there is very little available. Mr. Canosa plans on filling this gap.
Canosa has recently attracted other investors in his biochar product from both financial as well as strategic investors whereby he would license the technology to a manufacturer and collect a royalty on the output, still selling each unit for a healthy margin above cost. For instance, huge opportunity exists for biochar or activated carbon for agricultural and sawmill businesses. And tests in the sod industry have shown faster grass growth using less water if grown on soil including activated carbon. Wastewater treatment plants are also heavily dependent on activated carbon to filter toxic contaminants in the water supply. Preliminary estimates are for sales of well over 500 multi-million-dollar units nationwide, not including any biochar royalty payments.
Testing by 3rd party testing labs of the Good Earth designed units which had been operating nearly every week for extensive runs showed that the valuable activated carbon products made from waste wood and similar waste materials capture nearly all of the original material’s carbon without it returning into the atmosphere, compared to burning or decomposing in landfills. As a result, domestic biochar sells for 4-5x more than other types of organic fertilizers and far less than available biochar from China. As the EPA at some point refocuses on these issues, the company will expect to see even greater demand, especially as many municipalities have begun to bar agricultural waste from local landfills.
As to his third company, the exhaust treatment business, that product is still undergoing testing and has attracted interest from several major original equipment manufacturers and select aftermarket parts suppliers.
Nicolas has put his past successes to work to accomplish even more while making the planet a better place. Pasadena Private Lending is pleased to support Good Earth, Mr. Canosa and his team in these noble efforts.