investor presentation april-2016 -...
TRANSCRIPT
INVESTOR PRESENTATION APRIL-2016
©2016 QuantumSphere, Inc. (QSI) All Rights Reserved. ©2016 QuantumSphere, Inc. (QSI) All Rights Reserved.
OTCQB: QSIM
Kevin MaloneyyChairman & [email protected]
DISCLAIMER:
This presentation is provided for information purposes only and should not be construed as an offer, and shall not form part of an offer, or solicitation to buy or sell any securities or derivatives. It should not be considered as an invitation to subscribe for or purchase any securities in QuantumSphere Inc or as an inducement to make an offer or invitation with respect to those securities Noany securities in QuantumSphere, Inc. or as an inducement to make an offer or invitation with respect to those securities. Noagreement to subscribe for securities in QuantumSphere, Inc. will be entered into on the basis of this presentation.
To the maximum extent permitted by applicable laws, QuantumSphere and its affiliates make no representation and can give no assurance, guarantee or warranty, express or implied, as to, and take no responsibility for the authenticity, validity, accuracy, suitability or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation.
FORWARD LOOKING STATEMENTS:
Any information provided with this presentation related to timing, price, volume, and projected revenue are forward-looking statements and represent management’s best estimates as to its future performance. As such, these statements are not guarantees of future performance and are s bject to high risks ncertainties and ass mptions that are diffic lt to predict Therefore o r act al res lts performance and are subject to high risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results could differ materially and adversely from those expressed in any verbal or written forward-looking statements as a result of various factors beyond our control.
PAGE 1Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
QSI is Transforming the Chemicals Industry
• QSI products address key chemical production inefficiencies• QSI products address key chemical production inefficiencies
• Lead chemical: $100B market, critical to global food supply
100’ f l t l b ll b fit f QSI l iti• 100’s of plants globally can benefit from QSI value proposition
• Lead ammonia product, FeNIX™, commercially validated QuantumSphere OTCQB: QSIM
• JDA & sales agreement in place with industry leader, CASALE
• ~$50M/year revenue potential for lead product, FeNIX™
• Volume production capacity in place – backed by extensive IP
• QSI is poised for long-term profitable growth
PAGE 2Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
15% Energy savingsQSI Technology can add Billions in Annual Revenue to the World’s Most Critical Chemical Process…
…With a 10% Increasein Production Output.
Focus on Ammonia for Global Food Supply
• ~$100B Global Market; ~200M Tons/year
• World’s Most Critical Chemical ~82% Used for Agricultural Fertilizer Enables Global Food Supply and Population
R ibl f • Responsible for: ~50% of All Protein~2% of Global CO2 Emissions~5% of World’s Natural Gas Consumption~2% of World’s Energy Consumption
P d ti • Production: ~600 Ammonia Plants WorldwideHighly Inefficient Production Process
QSI Technology Increases Chemical Plant ProfitsPAGE 4Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
FeNIX™ Increases Catalyst Surface Area and Performance
Standard Ammonia Catalyst
FeNIX™ Nano-Coated Catalyst
FeNIX™ Nano Catalyst Accelerator
PAGE 5Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Catalytic reactions happen on the surface of the catalyst. Higher surface area = improved catalytic performance. Leveraging QSI’s patented process, a handful or ~15 grams of QSI’s FeNIX™ Nano Iron catalyst accelerator has the surface
area of about the size of a basketball court, or ~5000 square feet compared to the size of about one sheet of paper.
“Turbo-Charging” Ammonia Production
High S f A F NIX High Surface Area FeNIX Nano-Coated Catalyst
FeNIX™
AmmoniaConverter
10-15% Increase in Ammonia Plant Efficiency
FeNIX™High Performance Catalyst Accelerator
U.S. Patent No: 9,272,920
PAGE 6Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
High Surface Area = Increased Efficiency = Greater Profits
Partnership Executed with Industry Leader
• Joint Development Agreement, May 2015
• Global Ammonia Technology Leader
• ~40% of Global Production
• CASALE’s Exclusive Nano CASALE s Exclusive Nano Catalyst Provider
• Commercial Sales
Casale converter technology critical to global ammonia production Hundreds of ammonia plants worldwide can
benefit from increased production efficiency
PAGE 7
Commercial Sales Agreement, March 2016
Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
2 Key Channels for Market Penetration
1. Converter Technology
2. Catalyst TechnologyTechnology Technology
2 technologies required for ammonia productiong q p2 ways QSI penetrates the ammonia market
Additional market access, less risk
PAGE 8Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
dd t o a a et access, ess sFeNIX™ is a competitive advantage to converter & catalyst providers
QSI in the Value ChainFeNIX™ Nano Catalyst Accelerator Technology JDA & commercial sales
agreement with Casale
Leading Converter Providers
Leading Catalyst Providers
Dominant Producers
PAGE 9Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
No QSI sales force required – leverage existing partner networks
CASALE is Driving QSI Commercialization
• Conservative industry: multi-year/multi-step process
• Many driving forces; Economics Regulatory Social • Many driving forces; Economics, Regulatory, Social
• QSI commercialization in final stages, led by CASALE
Initial Commercialization – (2H-2016)
Commercial Sales Agreement – Casale (2016)Commercial Sales Agreement Casale (2016)
Commercial Plant Validation – China (2015)
Completed Manufacturing Facility QSI (2014) Completed Manufacturing Facility – QSI (2014)
External Lab Validation – China (2014)
I t l L b V lid ti QSI (2009 2013)
PAGE 10
Internal Lab Validation – QSI (2009 – 2013)
Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
QSI Offers a Compelling Value Proposition
100’s of ammonia plants globally could benefit •10-15% Increase in Catalyst Activity10 15% Increase in Catalyst Activity
Based on 2015 commercial plant validation
•Strong ROI & IRR for Ammonia Producersg~2 year payback; typical catalyst life ~10 years
•Two Ways Ammonia Plant Operators Win:
1. Production Increase
2. Energy Savingsgy g
A 5% increase in production output can translate to millions in revenue annually for a typical large-scale ammonia plant
PAGE 11Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
y yp g p
Delivering Shareholder Value
QSI Profit EconomicsStrong Gross Margins• Strong Gross Margins
QSI Production Capacity• Current Manufacturing Facility: 2–3 Plants per Year
$ Up to $15M in Annual Revenue Potential
• Economically Scalable Manufacturing Facility: ~$10M CapEx Investment Can Deliver up to $75M in Annual Revenue to QSI
PAGE 12Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Patented High-Volume Production
Economically Scalable | Highly Automated | Extensive IP
Inputs Vaporize Passivate Package
STEP STEP STEP STEP
PAGE 13
STEP1
STEP2
STEP3
STEP4
Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
U.S. Patent No: 7,282,167
FeNIX™ Increases Catalyst Surface Area and Performance
Standard Ammonia Catalyst
FeNIX™ Nano-Coated Catalyst
FeNIX™ Nano Catalyst Accelerator
• 10 Issued Patents
• 12 Years of “Know How”• 12 Years of Know-How
• High Surface Area Effect 12kgs of FeNIX™ Nano Iron Accelerator
PAGE 14Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
gWill Coat Nearly One Ton of Existing Commercial Ammonia Catalysts
Large Pipeline of Chemical Opportunities
QSI may ultimately improve many chemical processes
AmmoniaHydro-processing
Fischer-TropschMethanation
---------------------------
Olefins
Methanol
Ammonia FilterFilterMethanol
Olefins
Ethylene Oxide
Bio-RenewablesPoly-olefins
Hydrogen
Polyurethanes Syngas
~$450B
Fluid Cat Cracking
Sulfur Recovery
More… Parafins
--------------------------
~$1.5 Trillion in Basic Chemicals Produced Annually
PAGE 15
Up to 90% of all Industrial Processes Utilize Catalysts
Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
~$2B Total Available Market
C2-C4NH3 CH4O
T t l M k t $100B $300B $50B
2 43 4
Ammonia MethanolOlefins
Total Market: ~$100B ~$300B ~$50B
Total Available Market (TAM):
~$250M ~$1.5B ~$250M
QSI Addressable Market*:
~$50M ~$300M+ ~$50M+
Agricultural Paint, Adhesives, End Products:
Agricultural Fertilizer
Polymers, PlasticsPaint, Adhesives,
Fuels
Product Status:Anticipated
2H-2016Lab Validations
in ProgressLab Validations
Pending
PAGE 16
2H 2016 in Progress Pending
Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
*QSI Addressable Market is based on a blend of increased production and energy savings in plants directly accessible through Casale partnership.
Target Objectives and Next Steps
OPERATIONAL
• Execute commercial agreements with • Execute commercial agreements with additional industry-leading partners
• Complete follow-on commercial reactor
d
QuantumSphere OTCQB: QSIM
Complete follow on commercial reactor validation utilizing Casale technology
• Secure purchase orders via existing CASALE p gchannels for FeNIX™ ammonia catalyst sales
• Further validate follow-on nano catalyst accelerator products for Methanol and Olefins
• Continue to expand production capabilities to t d d d t t IP
PAGE 17
meet demand and protect IP
Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Public Company Background
• Founded in 2002 as an R&D companyFocused on industrial chemicals sectorFocused on industrial chemicals sector
• Became publicly traded in 2014 | Symbol: QSIM
$32M i it fi i g d t d t• ~$32M in equity financing secured to date~$7M in cash from board and management
• Recent Stock Price: $1 00 | Market Cap: $22 6M
QuantumSphere OTCQB: QSIM
• Recent Stock Price: $1.00 | Market Cap: $22.6M
• ~22.6M Shares Outstanding |~6.2M Public Float
• ~39.6M Shares Fully Diluted~11.6M Warrants | ~5.5M Options |~$25M Cash Value
NASDAQ U li ti g A ti i t d i 2016
PAGE 18
• NASDAQ Uplisting Anticipated in 2016
Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Experienced Management Team
Substantial business and technical qualifications to execute QSI strategy
~$7M in capital invested by Management, Board, and Advisors
Kevin Maloney, MBACo-Founder &Chief Executive Officer
• 21 years of experience in sales, marketing, and finance
• Formerly at PIMCO and First American Corporation
• Experienced entrepreneur with previous start-up experience
22 f i i i i M&A d h l Gregory Hrncir, Esq.Chief Strategy Officer &General Counsel
• 22 years of experience in corporate, securities, M&A and technology start-ups
Steve Gillings, MBAChi f Fi i l Offi
• 30 years of accounting experience at multiple public companiesChief Financial Officer
Matthew Griffith, MBAVice President, Operations
• 10 years of experience in commercialization and development of advanced materials and clean energy systems
Vito Canuso Esq • 20 years of IP litigation/portfolio experience with top IP law firm Knobbe Martens Olson and Vito Canuso, Esq.Vice President, Intellectual Property
• 20 years of IP litigation/portfolio experience with top IP law firm Knobbe, Martens, Olson, and Bear LLC
• Held senior position at Medtronics
PAGE 19Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Seasoned Board of Directors
Marc Goroff, Ph.D. • Chief Technology Officer and co-founder, Quorum Technologies. • Serial hardware and software technology entrepreneur • Earned Ph D in Theoretical Physics from Caltech at age 23Earned Ph.D. in Theoretical Physics from Caltech at age 23
Steven MyersGovernance and Nominating Committee Chair
• Chairman of Dolphin Capital Holdings, Inc., a private equity investment company • Chairman of Governance & Nominating Committee of Neostem, Inc., a biosciences company • Former Founder & CEO of SMA, an aerospace & defense mgmt consulting services business
Jeff Palmer, MBAStrategic Planning & Operations Committee Chair
• Founder & CEO of Rimports, $150M+ manufacturer of consumer products in major retailers• Finalist in the Utah regional competition for 2012 Ernst & Young Entrepreneur of the Year• Former Far East Area Director for ICON Health & Fitness in Hong Kong, fluent in Mandarin
and Cantonese
Francis Poli, Esq.Lead Director andCompensation Committee Chair
• General Counsel and Executive Vice President, Cohen and Steers, Inc. (NYSE: CNS)• Former Chief Legal Officer and Compliance Committee Chair with PIMCO and Allianz• Former JP Morgan counsel
Robert Venable MBA/CFA • Managing Director and Chief Financial Officer SW Asset Management LLC Robert Venable, MBA/CFA Audit Committee Chair
• Managing Director and Chief Financial Officer, SW Asset Management, LLC. • Former Chief Investment Officer at First American Corp, Capital Mgmt Division (NYSE: FAF)• Vice President in Charge of Global Asset Allocation at PIMCO
PAGE 20Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Notable Technology Advisory Board
Jared Cohen • Director of Google Ideas
• Co-Author with Google’s Chairman, Eric Schmidt; The New Digital Age – Reshaping the Future of People Nations and BusinessPeople, Nations, and Business
• Named one of the 100 Most Influential People in the World by Time Magazine – May 2013
• Stanford / Oxford / Rhodes Scholar
Bill Collins • Managing Director of Global Resource Management Consultancy (GRMC)
Key executive at International Rectifier ramping the company from $60M to over $700M in Revs• Key executive at International Rectifier, ramping the company from $60M to over $700M in Revs
• Frequent industry panelist and guest lecturer at CalTech, USC and LARTA
• Past President, Tech Coast Angels, Los Angeles
Jon Faiz Kayyem, Ph.D. • Member, Caltech Board of Trustees
• Founder, CMS (Acquired by Motorola)
• Chief Technology Officer, GenMark (NASDAQ: GMRK)
Prof. George Olah, Ph.D.Nobel Prize Winner
• Nobel Laureate (Chemistry, 1994) for research involving the generation and reactivity of carbocations via superacids
• Priestley Medal (American Chemical Society)
• Distinguished Professor of Chemistry and Chemical Engineering and Materials Science
• Director of the Loker Hydrocarbon Research Institute
• Dr. Olah served on the QSI Board of Advisors from Dec. 2005 through his retirement in Dec. 2014
PAGE 21Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Transforming the Chemicals Industry
• QSI technology increases chemical production efficiency• QSI technology increases chemical production efficiency
• Compelling value prop for 100’s of chemical plants globally
• Lead ammonia product, FeNIX™, commercially validated
• JDA & sales agreement in place with industry leader, CASALEQuantumSphere OTCQB: QSIM
• ~$50M/year revenue potential through lead product, FeNIX™
• QSI R&D complete – initial commercialization in final stages
• Volume production capacity in place – backed by extensive IP
• QSI is poised for long-term profitable growth
PAGE 22Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
QSIM - 3 Key Takeaways
Addressing Significant Market PainsUnique technology addresses key inefficiencies in large chemicals industryUnique technology addresses key inefficiencies in large chemicals industry
With Compelling & Profitable SolutionsValue proposition worth billions to 100’s of chemical plants worldwideValue proposition worth billions to 100 s of chemical plants worldwide
Driven by World-Class PartnersCommercialization led by global technology leader CASALECommercialization led by global technology leader, CASALE
Thank You!
PAGE 23Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM
Contact Information
Kevin Maloney, MBA Gregory Hrncir, Esq.Chairman & CEO General Counsel & CSO949 378 9851 818 400 5930
Contact Info:QSI-Nano Catalyst Production Facility; ~4 Metric Tons per Year Capacity
949-378-9851 [email protected] [email protected]
PAGE 24Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM