Ener Core Inc · OTC:ENCR
Ener Core — Investor Presentation (October 2016)
35 slides from Ener Core's investor presentation, Oct 14, 2016
Slide 1: A New Opportunity to Profit From Industrial Waste Gas
OTCQB: ENCR October 2016 A New Opportunity to Profit From Industrial Waste Gas
Slide 2: Forward Looking Statements
2 Forward Looking Statements This presentation has been prepared by Ener - Core, Inc. (the "Company"). It should not be considered as an offer or invitation t o subscribe for or purchase any securities in the Company or as an inducement to make an offer or invitation with respect to those securities
Slide 3: Business Overview
3 Business Overview Ener - Core is a licensor of its proprietary technology on a fee - based business model to leading global manufacturers of power, steam and heat generation equipment Technology extracts energy from industrial waste gases while reducing air pollution Resulting energy is used to pr
Slide 4: Highlights
4 Highlights • Disruptive Technology — Power Oxidizer provides a competitive advantage for customers, by generating on - site power, lowering OPEX and reducing emissions (air pollution) • Large Global Market — Growing $50 billion global industrial equipment market • First Global Licensee signed — Dr
Slide 5: Disruptive Technology for Pollution Utilization
Disruptive Technology for Pollution Utilization
Slide 6: Disruptive Technology for Pollution Utilization
6 Disruptive Technology for Pollution Utilization • Ener - core has designed, patented and built power generation systems around its proprietary “Power Oxidation” technology • Enables industrial companies to convert a liability (Air Pollution) into monetizable, clean utility - grade power • Industri
Slide 7: Power Oxidation: Generating Heat Without Ignition
7 Ambient air + waste gases are introduced to vessel Heat generated is: • Sent to a turbine to generate electricity; or • Sent to a boiler to generate steam The oxidizer vessel creates the environment necessary to facilitate an exothermic oxidation reaction, without ignition (no flame) Waste gases a
Slide 8: Standard Gas Turbine for CHP Plant
8 Standard Gas Turbine for CHP Plant 1. Air Intake 3. Turbine 2. Combustion Chamber Standard CHP Gas Turbine 4. Exhaust or Heat Energy 1. Ambient Air pulled in by compressor 2. Premium Fuel (converted to heat via combustion) 3. Thermal Expansion of air causes rotating of blades 4. Electricity
Slide 9: Modified Gas Turbine with Power Oxidation
9 Ener - Core Oxidizer Emissions Filter Power Oxidizer replaces the combustion chamber in standard gas turbines Modified Gas Turbine with Power Oxidation Our disruptive Power Oxidizer replaces the traditional combustion chamber & enables a gas turbine to generate clean power energy from “free” indus
Slide 10: Commercialization of Power Oxidizer Technology
10 Commercialization of Power Oxidizer Technology Power Oxidizer 2MW System 2 MW Power Oxidizer System + Gas Turbine Utility grade power Higher margins Entry into large addressable markets Gas volume closely aligned with needs of most industrial plants Ener - Core has Successfully Scaled the Technol
Slide 11: Significant IP Estate Protects Power Oxidation Technology Worldwide
11 Significant IP Estate Protects Power Oxidation Technology Worldwide 70 patent applications filed worldwide 41 patents granted worldwide, all awarded in last two years Other key components are protected as trade secrets Jan. 2015 – Inc. Magazine features Ener - Core as one of “Three of the Hottest
Slide 12: Technology Addresses A $50 Billion Global Industrial Equipment Market
Technology Addresses A $50 Billion Global Industrial Equipment Market
Slide 13: $50 Billion Market Opportunity: Expanding Scope of Combined Heat & Power
13 $50 Billion Market Opportunity: Expanding Scope of Combined Heat & Power Current Alternative to Purchasing Energy is: Distributed Energy Generation Solar, Wind, Microturbine, Fuel Cells & CHP – Projected $180 Billion by 2020 1 Combined Heat and Power (CHP): Generation of electric power and therma
Slide 14: Ener-Core Enables CHP PLUS
14 50% 75% 90% *Estimated based on Company Calculations from US EPA data Traditional System Efficiency* Electricity CHP System CHP On - site heat, steam and electricity Heat Expanding Scope of Combined Heat & Power - We Call it CHP PLUS CHP System + Pollution Abatement CHP PLUS On - site heat, steam
Slide 15: Targeted Industries & Potential Applications
15 Targeted Industries & Potential Applications Digesters Landfills Food Processing Chemicals Worldwide: $50 Billion Industrial Equipment Market United States: $10+ billion in ~15 vertical markets Oil & Gas Ethanol Plants / Distilleries Coal Mines Rendering & Animal Processing Byproducts Aerospace &
Slide 16: Cost of complying with global emissions standards is increasing
16 The cost of complying with global emissions standards is constantly increasing as the standards become more and more stringent Zero Flaring by 2030 Initiative World Bank’s initiative to end routine gas flaring by 2030 1 Initiative supported by 18 governments of oil - producing countries, 20 oil c
Slide 17: Significant End-Customer Value Proposition – Project IRRs in Excess of 25%
Significant End - Customer Value Proposition – Project IRRs in Excess of 25%
Slide 18: Ener-Core Power Oxidizer - Benefits
18 Ener - Core Power Oxidizer - Benefits Economic • Effectively Free turbine fuel from waste gas/VOCs • OPEX reduction • Commodity industries • Hedge against volatility of energy prices Environmental • Global pollution control mandates • Reduces air emissions • Lowest Achievable Emission Rate (LAER)
Slide 19: Macro-Economics
19 Macro - Economics • Global Market Opportunity – 3 million industrial facilities worldwide • $800 billion spend on energy to operate facilities (energy typically 10 - 30% of total industrial operating costs) • Monetary Value of Waste Gases = $65 Billion (enough electric power for all North America
Slide 20: First Commercial Deployment of Next-Gen 2 MW Systems
20 Pacific Ethanol Stockton Plant Q4 2016 , Dresser - Rand business planned installation of two commercial 2MW systems at Pacific Ethanol, a leading producer and marketer of low - carbon renewable fuels. Neil Koehler, Pacific Ethanol President and CEO: “Rather than destroying waste gases, we will re
Slide 21: "Asset-Light" Licensing Model
“Asset - Light” Licensing Model
Slide 22: Business Model: Commercial Licensing Deployment
22 Dec.’14 - Dresser - Rand receives Purchase Order from Pacific Ethanol for 2 Ener - Core next - generation (2 MW) systems Mar.‘15 - Ener - Core launches efforts to scale - up Ener - Core’s Power Oxidizer from 250kW to 2 MW (8x larger) and integrating with Dresser - Rand’s 2 MW turbine. Feb.’16 - E
Slide 23: Evolution of Ener-Core's Business Model
23 Evolution of Ener - Core’s Business Model Public Company & Begins Developing Sales Pipeline Signing of First Commercial License Agreement • Direct - Sale & In - House Manufacturing of 250kW systems 1) Must employ sales team 2) Gross Profits/Unit = $100k - $150k 3) Working Capital & Performance Gu
Slide 24: Licensing Market Opportunity
24 5 to 10 MW 10+ MW Target Future Licensees Licensing Market Opportunity Target Future Steam Boiler Licensing Partners *Licensee to be Limited by Size* *Licensee to be Limited by Geography* 1 to 4 MW Current Licensee
Slide 25: First License Agreement
25 First License Agreement June 30, 2016 – First commercial & manufacturing license agreement with Dresser - Rand business, part of Siemens Power and Gas Division Licensee will manufacture and sell the Power Oxidizers (integrated with their 2 MW KG2 gas turbine) directly to industrial customers Ener
Slide 26: Asset Light Licensing Business Model
26 Asset Light Licensing Business Model Single Licensee Economics (2MW): • $0.4 - 0.6 M per unit • 50% cash paid on order (net 30) • 50% cash paid on delivery (10 - 12 MO) Pathway to Positive Cash Flow: • Close 2 units/quarter + • Reduce manufacturing related expenses from current $1.2M per quarter
Slide 27: Capital Structure
27 Capital Structure Common Shares Outstanding Common Shares Outstanding as of September 30, 2016 (M) 3.8 Price per Share as of September 30, 2016 $3.10 Market Capitalization (M) $11.8 Convertible Notes (M) (1) $6.25 Cash Balance (M) (2) $1.0 Additional Paid - In Capital (M) $30.0 NOLs (3) (M) Feder
Slide 28: Proven Management Team
Proven Management Team With Combined 120 Years Experience in Power, Oil, Gas and Pollution Abatement Sectors
Slide 29: Management Team
29 Alain Castro, Chief Executive Officer and Board Member • 23 years experience in energy sector • Previously, President of Akuo Energy Americas, which has developed and financed approx. € 1 Billion in renewable energy infrastructure projects • London Business School: Sloan Fellowship, Executive Mas
Slide 30: Board of Directors
30 Michael Hammons, Chairman of the Board • Diverse domestic and international experience across multiple verticals such as telecommunications, energy, automotive, aeros pac e and defense, data storage, enterprise software, and electronic hardware. • Leadership positions including CEO at Vigilistics
Slide 31: Summary
31 Summary • Disruptive Technology — Power Oxidizer provides a competitive advantage for customers, by generating on - site power, lowering OPEX and eliminating emissions (air pollution) • Large Global Market — Growing $50 billion global industrial equipment market • First Global Licensee signed — D
Slide 32: Contact
32 Contact Corporate Headquarters Ener - Core, Inc. 9400 Toledo Way Irvine, CA 92618 Office: (949) 616 - 3300 Investors Relations: ENCR@ener - core.com Investor Relations Chris Tyson Managing Director MZ North America Main: 949 - 491 - 8235 chris.tyson@mzgroup.us www.mzgroup.us www.ener - core.com O
Slide 33: Appendix
Appendix
Slide 34: Combined Heat & Power Economics
34 Combined Heat & Power Economics +$6 Million +$5 Million +$4 Million +$3 Million +$2 Million +$1 Million Break Even - $1 Million - $2 Million - $3 Million - $4 Million - $5 Million - $6 Million - $7 Million - $8 Million - $9 Million 2 MW Purchased Power 13,500 Lbs./Hr. Steam Generated Separate Ste
Slide 35: Utilizing Waste: The Rockefeller Effect
35 Toward the end of the 19 th century, John D. Rockefeller was in the kerosene refinery business. All kerosene refiners used to throw away barrels of a “noxious by - product” into the creeks and rivers; this toxic runoff made Ohio’s Cuyahoga River flammable. It was said that if a steamboat threw aw