OTCQB: ENCInc. Company Presentation - May 2015 February 2015
OTCQB: ENCInc. Company Presentation - May 2015
February 2015
2 | © 2015 Ener-Core, Inc. OTCQB: ENCR
! Designs, manufactures and has commercially deployed in the US and Europe its proprietary technology that serves the needs of a variety of industries by enabling the conversion of waste gases directly into efficient, clean power (17 patents granted; additional 66 filed).
! Technology enables customers to: o Convert their own industrial waste gases into revenue-generating sellable energy, or… o Save money by using the converted energy to significantly reduce their energy purchases.
! First commercial license partnership in place with Dresser-Rand (first Dresser-Rand client: Pacific
Ethanol). Plans for additional license partnerships with multinational corporations capable of upselling to their existing customer bases.
! Shift to higher margin business by late 2017 when Company becomes a pure licensor of its technology.
! Management team and board of directors weighted with recognized leaders from the energy, power equipment and pollution control industries.
Company Highlights
Over 150 billion cubic meters of gas are flared annually
Monetary value = $ 65 billion Power for 100 million homes.
806.8 BCM
671.0 BCM
224.2 BCM
190.2 BCM
188.9 BCM
146.9 BCM
[Data Source: US Energy Information Association (EIA)]
If this were produced by a country, it would be the 6th largest global gas producer
150.0 BCM
The Divided Republic of Wasted Gas & Money
5 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Why do Industries not use their waste gases?
Combustion does not work with low energy gases! And combustion equipment does not work well with contaminated gases.
Industry uses combustion to obtain energy
from gases
Combustion needs fuel with high energy
content
| © 2015 Ener-Core, Inc. OTCQB: ENCR 6
• Clean base-load power
• Prevents and reduces emissions
• New value from waste gases – energy and revenues.
Ener-Core’s Solution The Power Oxidizer
7 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Power Oxidation Replaces Combustion
Heat (Useable Energy)
O2
High energy fuel
Oxygen (Air)
Combustion / Flame
Milliseconds
O2
Low energy fuel
Oxygen (Air)
Power Oxidization
Heat (Useable Energy)
2-3 Seconds
8 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Oxidation: A Natural Process
Oxidation occurs when a substance comes into contact with oxygen molecules. Almost everything, over time, reacts with oxygen…
Methane (in atmosphere) 10-20 years
Sterling Silver 2 weeks
Banana 5-7 days
Ener-Core 2-3 seconds!
Oxidation is usually a very slow process. Ener-Core accelerates this process.
9 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Power Oxidation - How It Works
Air + waste gases are introduced to vessel
Heat Generated ! sent to a Turbine to generate electricity,
or ! sent to a Boiler to generate steam
CH4 + 2O2 CO2 + 2 H2O
Oxidation Reaction:
The oxidizer vessel creates the environment necessary to facilitate an exothermic oxidation reaction
This reaction releases heat energy which can be used to drive a turbine
1) The gases are compressed, heated and mixed
2) At controlled high temperatures the molecules have enough energy to react when they meet without the chain reaction needed in a flame (combustion)
3) During a “long” residence time (>2 seconds) all compounds “collide” with an oxygen molecule and the oxidation reaction occurs
4) Energy is released from the oxidation reaction, heating the chamber and the gas in the chamber
5) Excess heat is carried out of the oxidization chamber with the gas that is then used to generate power.
10 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Ener-Core Technology – Turbine Configuration
Generator Turbine Combustion
Chamber
Heat Energy
Power (MW)
Compressed Air
Premium Quality Gas
Traditional Gas Turbine
Generator Turbine Power Oxidizer
Heat Energy
Power (MW)
Compressed Air
Low Quality Gas
Power Oxidizer Configuration
11 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Ener-Core Technology – Boiler Configuration
Steam Boiler
Heat (Steam)
Combustion Chamber
Heat Energy
Air
Fuel (gas, coal, Wood, biomass)
Steam Boiler
Heat (Steam)
Heat Energy
Air
Power Oxidizer
Low Quality Gas
Traditional Steam Boiler
Power Oxidizer Configuration
12 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Food Processing Plants Coal Mines
Petrochemicals Waste Water Treatment Plants Ethanol Plants / Distilleries
Oil & Gas
Ener-Core’s project economics are simple and consistent across a wide range of industries
13 | © 2015 Ener-Core, Inc. OTCQB: ENCR
MACRO description of the Opportunity for Multiple Industrial Sectors
Sources: www.global-greenhouse-warming.com www.eia.gov
3,000,000 industrial facilities worldwide generate 36% of global greenhouse gas emissions
Annual energy costs are over $800 billion
Waste Gas Near zero pollution
Energy savings of 35% to 50% per year at Industrial facilities
Increased Energy Efficiency
Power & Steam
14 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Specific Example of the Opportunity for one Industrial Facility
Average Industrial Ethanol Facility, Oil Refinery, Petrochemical Plant, etc. Produces waste gases that get treated through some form of Emissions Destruction equipment.
Energy is Purchased. Annual energy costs are $5 - $10 Million (typically, energy represents ~5% of Operating Expenses of Industrial Plant)
Waste Gas Near zero pollution
Energy savings of $3-10 Million per year
Increased Energy Efficiency
Power & Steam
15 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Unique Value Proposition
Waste Gas Destruction Systems
• Installation costs • Operation costs • Goal: Clean or destroy the waste gas
Ener-Core technology generates clean power from emissions
• Goal: Monetize the Gas by converting to energy; Sound Capital Investment
• Flares • Scrubbers • SNCR Systems
16 | © 2015 Ener-Core, Inc. OTCQB: ENCR
The Size of the Opportunity
Ability to use waste gas to produce clean energy represents… • 65 – 100 million homes powered / year • $65 billion annual electricity revenue • $100 billion equipment market
17 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
18 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
19 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Minimize Technology Risks
! Simply replacing one component (the combustor) of existing power generation systems
! No moving parts ! No catalyst – no complex chemistry ! Simple temperature and pressure ! Over 2 years of real operation
! The remainder of the power systems are the complex part – but they have already been perfected over decades.
20 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
21 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Build To Industrial Scale
2014 2015 2016
Commercial scale power
2018 2017
Steam application
Industrial power and steam
Larger Industrial power and steam
Industrial Boilers Large Industrial Boilers
Larger Industrial power and steam
1.75 MW 250 kW 5 MW 10 MW
Steam Generation Integration
Gas Turbine Integration
2019
22 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
23 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Ener-Core’s exclusive rights protect the design and utilization of Power Oxidation
• Total applications filed: 66
• 17 patents granted • 13 Patents granted in 2014
• Total independent claims: Over 150
• Total dependent claims: Over 1000
Power Oxidization Technology
Protect The Intellectual Property
24 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
25 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Provide the Bridge between Turbine Manufacturers and the market of low quality gases. Leverage their existing brands and sales networks.
Leverage Existing Brands
Potential $100 Billion power
equipment market related to low-
quality fuels
26 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Licensing/Partnership Strategy
<0.3 MW 1 to 4 MW 5 to 10 MW 10 + MW
Gas Turbine Market: ! Partner with one distinct market leader per turbine size segment
27 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
28 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Reduce Manufacturing Capital Costs
$0 M
$5 M
$10 M
$15 M
$20 M
$25 M
$30 M
$35 M
$40 M
$45 M
2014 2015 2016 2017 2018 2019
Purchase Orders Revenue to lag P.O.’s by 8-12 Months
Working Capital For manufacturing
Shift from manufacturing to licensor
Year 2015 2016 2017 2018 2019 EBITDA ($5MM) ($2MM) $6MM $30MM(1) $60MM(1)
Gross Profit Margins 20% 30% 40% 80%+(1) 80%+(1)
(1) Assumes full conversion to license only model
29 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
30 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Exploit Existing Sales Channels
“Technology Licensor”
31 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Introducing New Technology Successfully
1. Minimize Technology Risks
2. Build to Industrial Scale
3. Protect the Intellectual Property
4. Leverage Established Brands
5. Reduce Manufacturing Capital Costs
6. Exploit Existing Sales Channels
7. Attract Top Caliber Talent
32 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Highly reputable, respected professionals don't join small companies they don't believe in. Their options are much too vast.
Ex. Partner Oil & Gas Practice
Ex. Manager R&D Environmental Technologies
Ex. Global Head of Fossil and Renewable Energy Infrastructure
Ex. Global Managing Director of Power Generation
11th Administrator of the United States Environmental Protection Agency
Engineering Business Finance
33 | © 2015 Ener-Core, Inc. OTCQB: ENCR
Utilizing Waste: The Rockefeller Effect
For example, Rockefeller used noxious by-products that other refiners dumped into the river for heat to distill oil.
This toxic by-product was gasoline and soon after, the automobile industry was born; the automobile promised to consume that “vile, useless by-product,” and Standard Oil
cornered the new market.
John D. Rockefeller attributed a large part of his success to his aversion of wastefulness.
| © 2015 Ener-Core, Inc. OTCQB: ENCR 34
Thank you for your attention
Alain Castro, CEO
Watch our Whiteboard video explaining the power oxidation process and its applications
https://www.youtube.com/watch?v=YIwJNOF-SQU