An American Company for Wind

Launching a new American

manufacturingcompany for Wind Energy

2

Wind Energy will grow in 2011, uncovering a supply gap in global market for gearboxes; Recession obscures this gap with perceived over-capacity.

We are only American startup company in this space, will source tens of thousands of tons of high quality steel from U.S. companies, and directly hire more than a hundred machinists.

Team has +100 years combined experience in large gearbox business/market; and working closely with potential operating Partners, Customers & Steel Suppliers to take advantage of upturn.

Investment needed for high technology equipment and startup of state-of-art manufacturing for large wind turbine gears.

Our $11.6 million DOE Tax Credit (48c), and other various financing options and government incentives will offset Equity needed.

Vela Gear Systems – Executive Summary

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History – Thirteenth Century Wind & Hydro-Powered Mills

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History – 1885 (Cleveland) Charles Brush Wind Generator

Source: History of Wind Energy in America

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History – 1940’s (Vermont) Smith-Putnam Wind Turbine

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Americas Europe Asia

9,000 Megawatts or3,600 Turbines

Larger Turbines Repower + Offshore

40 GW or 20,000 Wind Turbines will be installed Globally every year,this demand exceeds Global capacity for large precision machined

parts like gearboxes and all gearbox components

8,400 Megawatts or4,700 Turbines

mostly Land Based

20,000 Megawatts or 10,000 Turbines

Very rapid growth

Global Wind Turbine Installations – 40GW Annually

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Global Wind – Annual / Cumulative Capacity (Megawatts)

400,000

300,000

200,000

100,000

0

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North American could be the “Saudi Arabia of Wind”

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Jet StreamNorth AmericanWind Fields

Ro

cky

Mo

un

tain

s

North American Geological Wind Energy Resources

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WTG (Nacelles)

Gearbox

Gens

Blades

Bearings

Castings

Towers

0 2,000 4,000 6,000 8,000 10,000

Megawatts

Dom

estic

Man

ufac

ture

dW

ind

Tur

bine

Com

pone

nts

Imports into North America for Wind

Impo

rted

Com

pone

nts

2009

2008

Gearboxes

Castings

Nacelles

2011

Generators

Blades

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TotalInstalled

Turbines

5,073

3,148

1,373

4,656

6,205

North American Wind Installations (Number of Turbines)

ForecastedInstallations

5,1954,885

5,825

Source: VGS Management analysis from AWEA and open press releases

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U.S. Wind Energy Growth – Market Drivers

ARRA Incentives

National RES

State RPS

BP Gulf Oil Leak

Power Demand

No PPA’s

Developers Slow

Suppliers Slow

No Energy Policy

U.S

. Win

d In

stal

latio

ns (

Meg

awat

ts)

?

Source: Emerging Energy Research

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U.S. Installation Forecast by Turbine Size

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Wind Turbine – Components

1515

GE Energy45%

Vestas18%

Siemens16%

Gamesa9%

Suzlon4%

Clipper1%Mitsubishi

7%

New American Manufacturing Plants

Vestas Colorado

Siemens Kansas

Gamesa PA, TX, MN

Nordex Arkansas

Acciona Iowa

Mitsubishi Arkansas

Wind Turbine – North American Market Share in 2008

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Wind Turbines – How Big?

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Wind Turbines – How Big?

Standard1.5 MWTurbine

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1987 1999 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Wind Turbine – Size is Increasing

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“The Heart of Wind Turbines” – the Main Drive Gearbox

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Jobs – Machining Large Components (Rotor Hubs)

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Jobs – Large Equipment and Assembly (Gearboxes)

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Jobs – Engineering and Manufacturing Precision Parts

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Jobs – Steel Forming, Forging, Rolling

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Jobs – Steel Ring Rolling

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More Jobs – Steel needed for Wind Towers, Bearings, etc.

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Vela’s Founder Visits Chinese Manufacturers

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Wind FieldsSkilled

Workers

Job Location = Wind + Skilled Workforce

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USA?

Europe?

Asia?

Where will Machines of the Future be Designed & Made?