Investor Presentation
6/30/2009By Larry Frew
Confidential
Table of ContentsBusiness & Industry Overview Current Challenges & PEI SolutionPEI Advantage & Market OpportunityTransaction & TimelineAppendix
Business OverviewPrevailing Energy, Inc. ("PEI") is an innovative
renewable energy technology company that is currently developing and commercializing the world's first economically viable and scalable Vertical Axis Wind Turbine Generator ("VAWTG") electricity generation system.
Benefits of VAWTG Technology:energy bill reducinglow-costreliableeasily scalablenon-pollutingaesthetically pleasingsilent & safe renewable energy
Industry OverviewThe rapidly growing small wind generated electrical market is currently served by the traditional prop-driven, Horizontal Axis Wind Turbine Generators (HATGs). As the market grows it has great potential to overtake other energy markets.
Industry OverviewThe state residential small wind incentives have grown over the past years
Noisy Propeller driven turbines
City zoning height requirements
ROI is very long, 8 to 15 years or more
Priced at $12,000 to $30,000 per HATG
High wind speeds of 12 MPH required
Turbines kill a number of birds & bats each year
High maintenance costs due to system’s complexity:
components to control blade pitch
brushes, belts, gears
cut-in and cut-out speed control mechanisms
special machinery to stay pointed into the wind.
Not scalable:
New systems needed to meet future growth demands
Current ChallengesThe traditional prop-driven, Horizontal Axis Wind Turbine Generator (HATG) suffers from numerous growth barriers.
Problems with this technology:
Turbines can only operate at 50-100 ft.
Runs silent – ideal for any urban setting
Zoning requirements: operates at 30 ft high or lower
Short ROI: 0-5 yrs. depending on wind speeds & rebates
Price ≤ $5,000 and many state rebates will pay total cost
Operates at wind speed ranging from 2 - 150 mph Safer for birds and bats; blades are visible at all
times Low maintenance costs due to system’s simplicity
PEI systems scale from 1kw to 1Mw cost-effectively
PEI SolutionThe new place-anywhere, Vertical Axis Wind Turbine Generators (VAWTGs) eliminate growth barriers and open up energy & cost saving opportunities.
Solutions found in our technology:
Turbines can operate at 30 ft.or lower.
PEI Solution
SolarWorks great with existing solar systems. When the sun is shining, solar power systems are working; when its cloudy and at night, wind power systems are working.
Patent Details The VAWTG is based on proprietary air-foil/winged shaped blades made of
composite materials and special type of Permanent Magnet Generators designed and invented by Mr. Larry Frew.
A Patent Application has been filed by PEI, Application No. US-2007/0126406 A1, covering all the innovative features incorporated by Mr. Frew into the VAWTG.
The VAWTG, with its configuration of omni-directional blades, can easily convert the entropic wind energy into highly stable, grid-quality electrical power.
PEI will control the IP for VAWTG technology in 52 countries world wide.
Proprietary system designs and embedded firmware are key barriers to entry.
Multiple patents are pending and being pursued on specific hardware and overall system components.
PEI Advantage – First Mover
Market OpportunityVAWTG target markets:
• 1.3 billion home owners world wide (128 million in US)• 3,000 wind dealers around the world• 7,000 solar dealers around the world
Market OpportunityClients
California test market Residential property Commercial facilities Dealer network
RevenueAfter commencing production, management estimates first
year revenue at $6,250,000.00 million (1,000 units at an average price of $6,250.00)
Year two revenues estimated at $31,250,000.00 millionProfitability
At a volume of 5,000 units, per unit price is estimated at $6,250
With an increase to 10,000 units, the piece price falls to $5,000
Schools - CA state rebates & PPA
Government facilitiesComplements solar systems
Proposed TransactionPEI is seeking $43 million in total financing
Secure patents worldwide (24-36 months): $400,000Complete prototype testing (6-9 months): $600,000Complete first article (6-12 months): $2,500,000Establish production facilities (6-12 months) and
Manufacturing capability: $36,500,000 Set up sales and marketing (6-9 months): $3,000,000
R & D, first round, We will have a small support staff to facilitate management and the various required groups: Mechanical and electrical Engineering, Drafting and PCB design and preliminary manufacturing staff
Manufacturing ,The second round of funding will establish the Manufacturing. It will include the tooling and Automatic Testing development, the Quality Group and Shipping and receiving.
Horizontal vs. Vertical
Vertical Detail
Potential Applications
Corporate OrganizationCEO/President
Larry Frew
Comptroller/Secretary
J ohn Sandberg
VP/ Director ofMarketing-Sales
Tom Quick
Dir of PurchasingCari Winter
CTOLarry Frew
Dir of EngineeringLarry Frew
Dir of ManufacturingTBD
TBDHR/Personel
Purchasing &Inventory
Dir of QualityTBD
Insurance
Mechanical EngineerTBD
PCB DraftingTBD
Electrical EngineerJ ohn Parretta
FirmwareJohn Parretta
TechTBD
Test EngineerJ ohn Parretta
Sr. MachinistTBD
MachinistTBD
TechTBD
Hardware/Software Test
Business AdvisorStephano Mangano
Marketing V.P. &Advisor to Sales
Robert McCarthy
Development Pipeline