Slide 1: Expanding the Reach of Power Generation for a Cleaner Future
JEXPANDING THE;REAGH OF POWER GENERATION FORA CLEANER FUTURE ~ OTCQB: ENCR Company-;Presentation - Sidoti January 2014 hee-core.com Confidential & Proprietary | © 2013 Ener-Core, Inc.
Slide 2: Legal Disclaimer
Legal Disclaimer This presentation has been prepared by Ener-Core, Inc. (he "Company’). It should not be considered as an offer or invitation to subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities. No agreement t
Slide 3: Quick Test: Photos of agricultural waste
Quick Test: Photos of agricultural waste SS ener. OTCQB: ENCR Confidential & Proprietary |@ 2014 Ener-Core, Inc. 3
Slide 4: Photos of Waste from Oil & Gas industry
Photos of Waste from Oil & Gas industry j 3 ener-cone OTCQB: ENCR Confidential & Proprietary |@ 2014 Ener-Core, Inc. 4
Slide 5: Photos of Waste from Coal Mining industry
Photos of Waste from Coal Mining industry CB ENER-CORE OTCQB: ENCR Confidential & Proprietary [© 2014 EnerCore, Ine. 5
Slide 6: Photos of Waste from Landfills
Photos of Waste from Landfills 3 ener-cone OTCQB: ENCR Confidential & Proprietary | ©2014 Ener-Core, Ine. 6
Slide 7: What did you see in those photos?
What did you see in those photos? Environmentalist’s perspective: “Huge contribution to global warming!!” “Methane is 21 times more heat-trapping than CO,!!” q v re -P Capitalist’s perspective: eh - <= “We should be finding a way to make money off those gases!!” v v “Wasted = ted Ti d Y fasted energ
Slide 8: What if there were a way to destroy the contaminants in those gases
, a F. ' What if there were a way to destroy the contaminants in those gases, while converting them into electricity? And what if the project economics yielded positive and attractive ROI’s for the industries which create this pollution? a OTCQB: ENCR Confidential & Proprietary | © 2014 Ener-Core, I
Slide 9: Ener-Core: What We Do
Ener-Core: What We Do We manufacture technology that converts low-quality (previously useless) gases into energy. Our Technology solves a massive environmental challenge of multiple industries suse in a profitable manner! 3 ENER-CORE OTCQB: ENCR Confidential & Proprietary |@2014 Ener-Core, Inc. 9
Slide 10: Components of the Overall Solution
Components of the Overall Solution Gradual Oxidizer Conventional Gas Turbine local Substation (transmit to grid) 3 ENER-CORE Interconnection to 3 ener-cone OTCQB: ENCR Confidential & Proprietary | © 2014 Ener-Core, nc. 10
Slide 11: Company history and milestones
First official sale booked, with First 250 kW. EECT in Receved peace unit Netherlands Edan Prabhu begins (itethod for successfully conta ;oved fro me ee eneak || Cotecton & |! “the design” | { tt tooKw || temo + R&D : "OY |) Use of Low- Calta prototype site in Ft. Level Methane a operates at || Benn
Slide 12: Strategic Intellectual Property Portfolio
Strategic Intellectual Property Portfolio + 4 Patents Granted IP Secured * 50+ Patent Applications filed | Oxidizer Technology | | * Hundreds of pages of descriptive fe} support | * Over 100 independent claims I r * Over 600 dependent claims —_ hi: << | iI it 3 ener-cone OTCQB: ENCR Confidential & P
Slide 13: How the Technology Works
How the Technology Works Exit Gradual Conditions Oxidizer controlled to (proprietary) match turbine power needs Compressed air ( Turbine System (third-party) Electricity SB enewcone SS ee
Slide 14: Ener-Core's Markets
Ener-Core’s Markets ORGANIC SOURCES LANDFILLS Z - WASTE-WATER TREATMENT PLANTS AGRICULTURAL DIGESTERS MINERAL SOURCES a OIL & GAS 3 ENER-CORE OTCQB: ENCR Confidential & Proprietary |@2014 Ener-Core, Inc. 14
Slide 15: Market Opportunity — New Fuels
Market Opportunity — New Fuels Ener-Core’s Oxidizer overcomes the barriers of low BTU fuel quality $77B Market Expanded Range of Acceptable Fuels 2600 4000 600 300 200 50 6 5 (Btu/sef) + + 4 Oil Field Pipeline Digester Landfill Coal Mine Ventilation Air Methane Power Generation without the Fuel Qual
Slide 16: Market Opportunity — Regulations
Market Opportunity — Regulations Ener-Core Oxidizer eliminates environmental restrictions Increased Environmental $36B Regulations Market 100 ppm 8 ppm below 1 ppm (ppm of NOx) High Low Ultra Low Emissions Emissions Emissions Power Generation with Lowest Achievable Emission Rates 3 ener-cone OTCQB:
Slide 17: Channels to Market/Strategic Positioning
Channels to Market/Strategic Positioning SUPPLIER: SALES CHANNELS: CUSTOMERS: (— Focus: Design & Manufacturing Scaling up to larger Sizes Increasing IP Footprint cae ENER-CORE Supporting Channel Partners Technical Support of O&M Partners in Field q UN-LOCKING a $77 BILLION MARKET for TURBINE PARTNER
Slide 18: Partner Development
Partner Development + Ener-Core is partnering with the leading turbine manufacturers + Ener-Core’s technology un-locks a new market for turbines, which is sized at $77 Billion (or greater) Ener-Core will establish 1 turbine partner per Size Category SIEMENS Year Deployed: 2013 2015 2014 2017 2016 20
Slide 19: PPA Price vs Project IRR
PPA Price (usw) 10% 15% 20% 25% Project IRR FP250 and KG2-3GO Calculated Project IRR's Assumed FP250 Installed Cost: $1.3M Assumed KG2-3G0 Installed Cost: $5.8M —+-FP250 PPA Price “@-KG2-3G0 PPA Price
Slide 20: Product Development with Turbine Partners
Product Development with Turbine Partners From Identifying Partner to integration, minimum of 12 months Turbine Supply & Packaging Business & Project Development OEM Agreement with Turbine Manufacturer Build & Deliver Commercial Offer lopment ak ation DIN ja 3 ENER-CORE OTCQB: ENCR Confidential & Pr
Slide 21: The Four Market Drivers
The Four Market Drivers High Prices & Intermittency of “other” sources of renewable energy 3 ENER-CORE OTCQB: ENCR Confidential & Proprietary |© 2014 Ener-Core, Inc. 21
Slide 22: Low BTU Gas - Advantages
Low BTU Gas - Advantages |< Ennei-Core Gradual Oxlaizer provides potential to use —__| lanai methane throughout most of the tana itecycle ‘Conventional technologies (reciprocating enignes ‘and gas turbines are limited by metnane content ; (~40% to ~30% lower mit) / Enet-Core Gradual Oxiaizet ‘wide o
Slide 23: Low BTU Gas - Advantages
Low BTU Gas - Advantages Fuel Energy Density (Btu/lb) Fuels Energy Density Comparison Fossil Fuel Commodities Btullb = Energy Density Btu/ib 3 ener-cone OTCQB: ENCR Confidential & Proprietary | © 2014 Ener-Core, Inc.. 23
Slide 24: Competitiveness Against Other Power Sources
Competitiveness Against Other Power Sources High Prices & intermittency of “other” sources of renewable energy 4 Technology Si Kw) Installed Cost] CapexMW 20 years O&M 20 year fuel treatment & exhaust cleanuy cost ‘Gas Turbine $3,080,000 $7,374,510 $1,540,000 $2,101,000 | 20,458,477 $8,007,19: $17,7
Slide 25: Competitiveness Against Other Power Sources
Competitiveness Against Other Power Sources In some markets (US & International), there are Renewable Power Feed-in-Tariffs, or ; es are forced to procure a % ei e ene’ le e ces. Hig Pipes Utilities are forced to procure a % of their power from renewable power sources Intermittency of In these marke
Slide 26: Markets with High Electricity Prices (U.S.)
Markets with High Electricity Prices (U.S.) Approximate PS ¥ Commercial Rates: ‘Approximate q Commercial Rates: CA: $0.16/kWh J CT: $0.14/kWh AK: $0.15/kWh - MA: $0.14/kWh HI: $0.39/KWh NJ: $0.14/kWh NY: $0.15/kWh 3 ENER-CORE OTCQB: ENCR Confidential & Proprietary | © 2014 Ener-Core, Inc. 25
Slide 27: Markets with High Electricity Prices
Markets with High Electricity Prices Approximate Commercial Rates: Euro Area, UK & Ireland: $0.15/Wh Approximate Electricity Rates: Japan: $0.20/kWh Philippines: $0.30/kWh Approximate Electricity Singapore: $0.22/kWh Rates: Australia: $0.22/kWh_ Panama $0.14/ “a Brazil: $0.34/kWh 3 ener-cone OTCQB:
Slide 28: Legislation (US)
Legislation (US) Obama Administration’s July 2013 Climate Plan recommends an Interagency Methane Reduction Strategy to achieve methane emissions reductions from multiple sectors. CH, & Pollutant Renewable, Vision for Use of Ag Waste Pricing for Reduction Baseload Power Net Zero Bases Resources Bioga
Slide 29: Legislation (Globally)
Legislation (Globally) islation on Restrictions on flaring; Flaring Decree to use 95% of, Associated Petroleum Gas. andlor Increased Air Emissions Landfill methane capture Restrictions on NOx and. Particulate matter GHG restrictions GHG credits at ~$14/tonne Restrictions on NOx and Particulate matte
Slide 30: Management Team / Board of Directors
Management Team / Board of Directors 7 FosteSiitenateenes ogre + Dr. Boris Masiov, President Mra Ps acy PhD, ac ngomng BS, rs gag 1 Wereomsran Ouecpren Hi Fecesogy wets eed Statage Ping = Sees panee CEO tmrrom CoD enon neon + Kelly Anderson, Chief Financial Officer and Treasurer Galera GPa race wt 8
Slide 31: Tare
a. ry ; Tare OTCQB: ENCR Confidential & Proprietary | © 2014 Ener-Core, Inc.
Slide 32: Company Highlights
Company Highlights Stockholders Equity (at 9/30/13) - $1.5M Cash (at 12/31/13) - $1.1M Debt (at 12/31/13) - $0.00 Ownership — SAIL Capital —- Common 45.6%, Fully Diluted 40.4% CB ENER-CORE OTCQB: ENCR Confidential & Proprietary |© 2014Ener-Core, Ine, 92
Slide 33: Ener-Core Stock Information
Ener-Core Stock Information Price (1/10/14) $1.25 Shares outstanding (12/31/13) 72.6M Exchange OTC QB Market Cap $90.7M S03 ENER-CORE OTCQB: ENCR Confidential & Proprietary |© 2014 Ener-Core, Ine. 9
Slide 34: Capitalization Table
Capitalization Table Employees Executive and Board of Directors Non-Executive Other SAIL Ventures Other Shareholders Totals 1,689,957 2.33% 4,450,000 6,139,957 7.49% 3,391,377 4.67% 4,460,000 7,851,377 9.58% 33,084,946 45.60% 33,084,946 40.36% 34,387,894 47.40% 511,087 34,898,981 42.57% 72,554,174 1
Slide 35: Balance Sheet — September 30, 2013
Balance Sheet — September 30, 2013 December 31, 2012 8970 102,255 878,118 47414 September 30, 2013 (Cnaudited Assets Cash and cash equivalents 8 763,170 Restricted cash 50,005 Inventories 64.980 Prepaid expense nd eher coment een ‘Total current assets 1,180,223 Property and equipment, net 736,609 In
Slide 36: 2014 - 2016 Forecast
2014 - 2016 Forecast Projected Orders FP250 5 5 ie) FP333 0 5 10 IKG2 2 7 9 FP250 4 7 0 FP333 te) 3 8 IKG2 i} 3 a1 Projected Revenue Revenue $3,400,000 $14,600,000 $28,700,000 ‘{Senen-cone OTCQB: ENCR Confidential & Propitay | 2014 Ener-Coe, Ine. 36
Slide 37: Warranty — 3% of Sales
— €& Lo Warranty — 3% of Sales Product
Slide 38: Sales Cycle
Sales Cycle PO to Revenue es O Prod build PO Procured allation and 30% Down Five - Nine - _ payment Upon PO | Months Three months + (dependent on 30% t 109 t #e paymen turbine lead times) % paymen received upon received prior to drawings 30% payment shipping received upon receipt of materials Intern
Slide 39: 2014 — 2016 Sales Assumptions
2014 — 2016 Sales Assumptions « Planned product deployment during 2014-2016 a FP2SO (250 kw) FP333, (333 kW) KG2-3G/GO (2Mw) + Projected sales team composition 2014 2015 2016 Sales Employees 2 4 4 Reps/Agents 7 10 10 Distributors 10 AS) a5) Turbine Partners 2 3 4 3 ener-cone OTCQB: ENCR Confidential
Slide 40: Miscellaneous
Miscellaneous Current facility - 29.5K sq.ft. —industrial/mfg/warehouse 13K sq.ft. Current production capacity - 20 units/year « Long-term goal — license to Turbine partners Breakeven sales forecast — 10 (2mw units). * Sales team — Leads primarily sourced through partners — Team takes on sales suppo
Slide 41: Ener-Core Powerstation
a i a i ENER-CORE POWERSTATION §/5 ENER-CORE OTCQB: ENCR Confidential & Proprietary | © 2014 Ener-Core, Inc. 41
Slide 42: Supplemental Slides
SUPPLEMENTAL SLIDES CB ENER-CORE OTCQB: ENCR Confidential & Proprietary [© 2014 EnerCore, Ine. 42
Slide 43: Modern Landfill Design
Modern Landfill Design 3 ener-cone OTCQB: ENCR Confidential & Proprietary | ©2014 Ener-Core, Ine. 3
Slide 44: Market Opportunity — Landfills Markets
Market Opportunity — Landfills Markets Landfill Methane Generation Potential 2471 I I MW Equivalent Potential v0e 219 221 186 432 108 0 ir | I Bee ee @ ww ew ee & & sr roe e S oe J A & af * Fr St ee rl Robust Landfill and Biogas Markets - $56B 3 ENER-CORE OTCQB: ENCR Confidential & Proprietary |© 20
Slide 45: Market Opportunity — Coal Mine Methane Markets
Market Opportunity — Coal Mine Methane Markets Sy "Phy Ventilation Air Methane is an Immediate Opportunity "enn, U.S. 810 MW Ukraine 742 MW Russia 293 MW equivalent equivalent equivalent China 5207 MW equivalent Australia 354 MW equivalent equivalent Robust Coal Methane Markets - $21B 3 ener-cone OT
Slide 46: Market Opportunity — Petroleum Gas Markets
Market Opportunity — Petroleum Gas Markets Waste Gas in Oil Fields is an Immediate Opportunity (Russia example) Fig. 5: Geographic distribution of main APG flaring volumes (bem) 441 MW equivalent co 524 MW equivalent , 1350 MW equivalent Ze BR 1407 MW equivalent 276 MW equivalent’ Robust Oil Field G
Slide 47: Product Deployment History
Product Deployment History 4 2008-2010 2011-2012 (2013-2014 2014 - 2016 Pilot Project. 250 kW system Launch of global sales Scale up of Ener- Concept is proven on generates electricity at |_| of 250 kW systems for Core systems to 2 100kW system at Fort Benning landfill power generation with MW and l