strategic business plan—alkane truck...

STRATEGIC business plan—alkane truck company

Executive Summary–CURRENT PROJECTS .......................................................................................................................................................................1 alkane truck company ..........................................................................................................................................................................................1 medium heavy duty, class 7 delivery truck ................................................................................................................................................1 class 8 heavy duty tractor ...............................................................................................................................................................................1 Executive Summary–FUTURE PROJECTS ..........................................................................................................................................................................2 on road/off road dominator™ ..........................................................................................................................................................................2 corepower usa ..........................................................................................................................................................................................................2 Executive Summary–current addressed markets ................................................................................................................................................3 united states ..............................................................................................................................................................................................................3 california ....................................................................................................................................................................................................................3 canada .........................................................................................................................................................................................................................3 latin america/mexico ............................................................................................................................................................................................3 company description ........................................................................................................................................................................................................... 4 streamlined business model .............................................................................................................................................................................. 4 proprietary rights ..................................................................................................................................................................................................5 supply chain ....................................................................................................................................................................................................5 strategic agreements ...........................................................................................................................................................................................6 foton china ......................................................................................................................................................................................................6 agrale brazil .................................................................................................................................................................................................6 corepower china ...........................................................................................................................................................................................6 COMPONENT CERTIFICATION AND PRODUCT TESTING ...........................................................................................................................................7 fuel cost comparison..................................................................................................................................................................................7 company products .................................................................................................................................................................................................................8 alkane class 7 truck .............................................................................................................................................................................................8 alkane class 8 truck .............................................................................................................................................................................................9 sales and service OF ALKANE VEHICLES....................................................................................................................................................................... 10

Ownership, management and personnel ....................................................................................................................................................................11 alkane’s quality partners ............................................................................................................................................................................................. 13 triad services group ........................................................................................................................................................................................... 13 foton/daimler ........................................................................................................................................................................................................ 13 power solutions international ...................................................................................................................................................................... 13 BI-PHASE TECHNOLOGIES ......................................................................................................................................................................................... 13 LINE-X® PROTECTIVE COATINGS ........................................................................................................................................................................... 13 agrale brazil .......................................................................................................................................................................................................... 13 corepower china ................................................................................................................................................................................................... 13

STRATEGIC business plan—alkane truck company

USE OF PROCEEDS .................................................................................................................................................................................................................... 14 SUPPLIER TO CUSTOMER MAP............................................................................................................................................................................................... 15

ALKANE FINANCIAL MODEL ................................................................................................................................................................................................... 16 ALKANE CLASS 7 REVENUE ..................................................................................................................................................................................... 16 ALKANE CLASS 8 REVENUE ..................................................................................................................................................................................... 18 COST OF GOODS AND GROSS PROFIT ...................................................................................................................................................................... 19 PROJECTED PRE-TAX INCOME ............................................................................................................................................................................................... 20 RETURN ON INVESTMENT .........................................................................................................................................................................................20 CLOSING COMMENTS–WHY ALKANE TRUCK COMPANY? .................................................................................................................................20 CONTACT INFORMATION ...........................................................................................................................................................................................20

The Definition of ALKANE:

Alkanes are the chemical compounds that consist of the elements of carbon and hydrogen such as

methane, ethane, propane, butane, and pentane. Alkanes are the primary chemical compound found

in clean burning natural gas.

Alkane Truck Company has completed compliance testing and is ready to launch a new line of alternative fuel and clean burning trucks in North America, Latin America and South America. Alkane’s Class 7 and Class 8 vehicle offerings will operate on Liquid Propane Autogas (LPG), Compressed Natural Gas (CNG), Liquified Natural Gas (LNG) and Renewable Natural Gas (RNG). The primary addressed markets are those where regulatory and elective reduction in harmful diesel related emissions has become a growing priority. Alkane will use a simplified, streamlined business model that brings to market a unique competitive form of production, assembly, and distribution.

Medium Heavy-Duty Class 7 Delivery Truck (26,000 – 33,000GVW)The Class 7 liquid propane auto-gas (LPG) powered cab-over-chassis has achieved Department of Transportation (DOT) compliance and is ready for production. Powered by an EPA/CARB Certified PSI 8.8 liter liq-uid propane injection powered engine, this truck produces 550 ft lbs of torque at 3100 RPM. The truck will primarily function as a box delivery, beverage delivery, propane bobtail, pumper tank or flatbed delivery vehi-cle. The favorable overall length of this cab-over-chassis design increases fleet owner’s revenue per mile with more box space for delivered goods. Markets in Mexico and Canada have specifically reached out to Alkane for our LPG solution. The Alkane Class 7 cab-over is the only one of its type in this weight class powered by liquid propane.

In addition to a liquid propane fueled Class 7 truck in this weight class, there is also significant interest, especially in California and across the U.S., for Alkane to incorporate the recent Cummins/Westport ISL G Near Zero (NZ) NOx natural gas 8.9 liter engine into Alkane’s Class 7 chassis. This game-changing EPA/CARB certified natural gas engine emissions are 90% lower than the current EPA NOx standard and the ISL G NZ meets the 2017 EPA greenhouse gas emission requirements with a 9% GHG reduction. Part of the “Use of Proceeds” is proposed to incorporate and launch an Alkane Near Zero NOx Class 7 natural gas truck which will be attractive in reducing harmful emissions in high-smog laden cities in the U.S. and around the world.

Heavy-Duty Class 8 Tractor (Up to 80,000 GVW) The Alkane Class 8 cab-over-chassis with natural gas powered engines is our entry into the long-haul trucking market where sustainability objectives are a priority in reducing diesel powered trucks with their health harmful emissions. A portion of the “Use of Proceeds” is allocated to this Alkane product line that can be brought to market within ten to twelve months of funding as we complete the DOT compliance testing with an EPA/CARB certified Cummins Westport 11.9 liter natural gas engine. Since Alkane’s Class 8 truck is a cab-over design, it has a tighter turn radius and is more maneuverable in congested inner-city areas.

executive summary–CURRENT PROJECTS

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80,000GVW

26,000GVW—33,000GVW

PSi 8.8-liter v8 propane powered engine

CUMMINS WEStPORT ISX 12Gnatural gas ENGINE

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Future Projects In The Strategic PlanThe capital raise for this phase of the Strategic Business Plan is focused on launching the Class 7 and Class 8 Alkane truck lines. There are ad-ditional products in the pipeline that will be funded by future internal earnings or additional sources of third-party capital including grants promoting the use of electric vehicles.

The future product lines are:

Alkane DominatorAlkane Truck Company is preparing a Humvee-Style all-terrain vehicle that is replacing the void left by the Hummer H1 and Hummer H2. The Dominator will be ideally suited for government, military, border patrol, and municipal applications as well as the civilian on/off road enthusiast. The vehicle will come in a variety of fueling systems based on sustain-ability and fuel access market demands. Standard on each Dominatoris the full-body LINE-X Polyurea coating that prevents rust, scratches, and abrasions on all treated surfaces. Alkane will also develop bullet resistant armoring for police and military applications.

Corepower USAThe vision of Corepower USA is to empower drivers with high-quality, yet low cost all-electric vehicles. The key car components will be manu-factured in China and assembled in the United States. Corepower USA has signed agreements to have exclusive right to sale and service the Corepower plug-in electric cars in North America, South America, Cen-tral America, and the Caribbean.

executive summary–FUTURE PROJECTS

100% 0%

ELECTRIC EMISSIONS

Corepower USA has the exclusive rightS to sell and service the Corepower plug-in electric cars in North America, South

America, Central America and the Caribbean.

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The Alkane Dominator™ at the 2016 SEMA Show in Las Vegas Nevada

14,001GVW

Current Addressed Markets

United States: The U.S. is experiencing a strong movement toward the use of greener, lower-polluting fuels. For example, the VW funded Emissions Mitigation Trust will distribute $2.7 billion for projects that will reduce diesel related emissions starting in 2018. These funds can be used to upgrade or replace aging diesel-powered vehicles with newer and cleaner burning engines. Alkane is actively pursuing these projects to use Alkane’s new propane powered delivery trucks to replace aging diesel-fueled trucks.

California: Over 40% (approx 129 million) of our U.S. population live in federal ozone regions that are classified as “Non-Attainment Regions” which fail to meet reasonable air quality standards with California being the worst. Nitrous Oxides (NOx) and Particulate Matter/Soot (PM) are the major contributors in these regions and are called criteria pollutants. Heavy-duty and medium-duty trucks are the top producers of NOx and PM. The Cummins-Westport Near Zero NOx engines are gaining tremendous notoriety in California due to their NOx reductions that are 90% below today’s EPA NOx standards. Alkane’s competitively priced Class 7 and Class 8 Trucks with Near-Zero natural gas engines are expected to gener-ate significant market demand.

Canada: Quebec has launched their Ecocamionnage Clean Air Program which provides fleets up to a $30,000 financial incentive related to the acquisi-tion of alternative fuel vehicles. A LPG-Autogas team from Quebec visited the Alkane U.S, headquarters in early-August 2017 and is project-ing annual demand for thousands of propane delivery trucks per year. In addition, the Ontario Ministry of the Environment and Climate Change (MOECC) has established guidelines to distribute $170m ear-marked for alternative fueled vehicles. The program is expected to launch in late-2017 and gain a full head of steam in 2018.

Latin America /Mexico:In January 2017, the Mexican government eliminated certain fuel subsidies for diesel and gasoline resulting in an immediate 15%-20% in-crease in diesel fuel prices. This action created over a 50% favorable price spread between higher diesel prices and lower propane and natural gas prices. In addition, continued degradation of air quality and smog alerts have motivated Mexican federal and city officials to address their envi-ronmental issues. During 2017, the Mexican Environmental Authority began implementing mandated cutbacks in daily deliveries to major cities if fleets continued to use diesel-fueled trucks. If alternative-fueled trucks are used, the delivery ban is lifted. These economic and environmental issues have caused a wave of interest in alternative fuel vehicles, especially like Alkane’s Class 7 LPG truck which is perfect for the inner-city deliver-ies. Alkane is in discussions with LPG and natural gas fueling suppliers, multiple alternative fuel truck dealer candidates, and potential in-country strategic contract assemblers.

executive summary

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1 Alternative Fuels Data Center

company description

ALKANE’S emphasis has always been on the engi-neering, assembly, production and distribution of clean-burning, less polluting, trucks and cars.

we will utilize established suppliers that offer the latest cutting-edge technology in clean-burning engines and fuel systems. we will produce vehicles that are fueled with natural gas (CNG), auto gas (LPG), Liquid natural gas (LNG) ...as well as 100% electric.

it is the desire of this company to be a good steward of our environment, use American energy first and provide jobs right here at home.

Alkane will use a streamlined business model that brings to the market a unique competitive form of production.

Streamlined Business ModelAlkane Truck Company enjoys a unique OEM position in the market with regard to pricing because of our direct preferred-supplier relation-ships as well as our very low overhead. We are able to purchase vehicle bodies with no drivetrains from Foton-Daimler and Agrale Brazil, at very competitive prices and integrate U.S. drive trains and fuel system components from other contracted suppliers at equally good prices. This allows us to sell our trucks at a price lower or comparable to other manufacturers of the same sizes and weight class.

The large manufacturers are not interested in the small sustainability niche markets with which Alkane Truck Company is involved. Our business is based on capturing a small percentage of the overall market for Class 7 and Class 8 trucks. In 2016, the total sales of Class 7 and Class 8 combined amounted to over 500,000 trucks. Of this total, our initial goal is to sell 3,000 trucks a year through dealership networks.

Our solution is a simplified business model that brings to the market a streamlined form of manufacturing and distribution. We use the highest quality parts and components available–produced in the capital intensive manufacturing facilities of our world class trading partners.

Contracts with specific third-party quality producers allow us access to name brand components without the fear of competition with the large manufacturers. For example, we purchase our 8.8-liter PSI block engines from a third party source in business to sell name brand engines pow-ered by natural gas. Alkane Truck Company is one of their many buyers.

Significant U.S. based labor is required as we combine the engines, trans-missions and American-made fuel systems with the Chinese or Brazilian vehicle chassis. When the trucks are completely assembled and all parts are integrated, considering those costs plus labor, the trucks are then determined to be U.S. OEM (original equipment manufactured) since the value-add content exceeds 51%. This allows us to issue our own VINs as well as qualify for GSA contracts.

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Proprietary RightsThe CEO of Alkane Truck Company has been doing business with China since 1980. We are buying a product from them and their only interest is in selling it. We are the assemblers and integrators of value- added components. We engineered the design of the completed trucks and are the owners of the proprietary rights of the design. We ensure that all components used do not infringe on any other company’s rights.

EPA, DOT, and CARB certifications are time consuming and expensive but are mandatory or preferred in our multiple North, Central, and South American addressed markets. The Chinese nor the Brazilians have expressed an interest in meeting these oppressive regulatory barriers to entry. To date, Alkane Truck Company has invested close to $5,000,000 and years into this effort to assemble the right suppliers, engineers, and contract assemblers to be ready for a commercial launch. The reluctance of foreign manufacturers to go thru this lengthy and costly process gives Alkane a significant competitive advantage to be “first to market” as the market leader.

Supply ChainIn most cases we deal directly with the manufacturers of our compo-nents and have back-up suppliers in the event of any issues. We will purchase the chassis/cab from China in a way that will provide a steady continuous flow of production for our contracted assemblers. We plan on building our inventory pipeline around scheduled quantities being built in China, on the water enroute to the U.S., and work-in-process being assembled at our contract assemblers. All of our medium-duty and heavy-duty trucks will be shipped to Alkane as knock-downs from our manufacturing source. The term knock-down is used to describe a vehicle that is crated as parts and not as an assembled vehicle.

Receiving vehicles in crates as knock-downs or assemblage of parts allows us up to a 70% reduction in shipping costs and also a more favor-able tax status. This makes sense since tariffs and duties are a large part of the import/export expense.

Our unique knock-down contract assembly production model allows Alkane to retain a low overhead structure compared to the large truck manufacturers resulting in a more competitive wholesale price. Those savings will be shared with our dealers, customers and investors.

COMPANY DESCRIPTION

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Strategic AgreementsOver the past several years, Alkane’s CEO has been able to form several unique and strategic business relationships and agreements to provide vehicle knock-downs to sell and service in North America, South America, Central America, and the Caribbean.

Foton ChinaOne of these key strategic exclusive agreements is with Foton-China which will provide the Class 7 and Class 8 chassis/cab. Foton was founded in August, 1996 and is headquartered in Beijing, China. With fixed assets of over $4.8 billion US dol-lars and nearly 400,000 employees, Foton is ranked first in the global production and sales of commercial delivery vehicles and is a competitive component of Alkane’s business model.

Agrale BrazilIn the second phase of Alkane’s Business Model, Agrale-Brazil is providing the knock-down kits for the Alkane Domintor. This vehicle is a ruggedized four-wheel drive on-road and off-road machine that replaces the void left by the Hummer 1 and Hummer 2. Agrale is a Brazilian manufacturer of military vehicles, commercial vehicles, engines, and agricul-ture tractors. They are based in Caxias do Sul, in the state of Rio Grade do Sul. Established in 1962, the brand’s current model line-up consists of the Marrua SUV and pick-up trucks. Agrale is the sole provider of military vehicles to the Brazilian government.

Corepower ChinaAnother strategic future product is the affordable EV1, EV2, and EV3 electric car. CorePower (Fujian) New Energy Auto-mobile Co. is a subsidiary of Core Power Group located in Sanming City Yongan Pu Ling Automobile Industrial Park in Fujian, China. Core Power ‘s new Fujian manufacturing facility will cover 3.5 million square feet and include stamp-ing, welding, painting, assembly, and four major automobile manufacturing processes. A total investment of $500 million is expected to produce an annual output of 300,000 units of new energy electric vehicles.

COMPANY DESCRIPTION

Alkane Truck Company signs an exclusive agreement with Agrale, Brazil. The agreement names Alkane its sole representative for sales and service of the Agrale brand in North America--to include the U.S., Canada and Mexico.

The signing ceremony between Core Power China and Alkane Truck Company occurred at the Core Power (Fuijan) New Energy Automo-tive facility in Fuijan Province, China. Joint Venture MOU documents were signed, establishing a new company, Core Power USA. The Joint Venture Agreement gave exclusive rights to Core Power USA to sell and service the Core Power plug-in electric cars in North America, South America, Central America and the Caribbean.

In October of 2015, Alkane Truck Company signs an Agency of Service Agreement with Foton-Daimler. The agreement allows Alkane to be the sole representative of Foton Trucks in the USA.

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Corepower’s 3.5 Million Sq. Ft. Manufacturing Facility

COMPANY DESCRIPTIONComponent Certification and Product TestingAll of the drive train components plus the fuel system have to be certi-fied individually as well as collectively in order to achieve the accept-able commercial rating to sell trucks. Once the truck has been certified for EPA and CARB, it has to go through a series of DOT testing and inspection which involves brakes, SAE glass, headlights, bumpers, etc.After the truck has passed compliance, it is put through a series of rigorous road tests in hot and cold climates as well as mountainous terrain before the truck is deemed acceptable for sale to the dealer-ships and end customers.

Fuel Cost ComparisonAccording to the U.S. Department of Energy, the average price for fuel in the U.S. during the summer driving season of 2017 is $2.28 for gasoline and $2.49 for diesel. Liquid propane distributed residen-tially averages $2.40/gallon. Propane, when purchased at fleet volume discounts is priced around $1.30 per gallon. Many natural gas propane marketers will construct a fleet yard propane fueling station free of charge in return for a three to five year fueling contract. For the Class 8 natural gas market, average contract CNG prices are around $1.75.

Alkane Class 7 delivery truck with 60 gallon propane tank CNG Fueling Station

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FUEL COST COMPARISON 2017 – SUMMER DRIVING SEASON$4.00 gal

$3.75 gal

$3.50 gal

$3.25 gal

$3.00 gal

$2.75 gal

$2.50 gal

$2.25 gal

$2.00 gal

$1.75 gal

$1.50 gal

$1.00 gal

$.75 gal

$.50 gal

$.25 gal

$.00 galDIESEL GASOLINE CNG LPG

$2.49

$1.75*

$2.28

* Natural Gas Fleet Volume Discounted Prices.

$1.30*

Alkane Class 7 TruckAlkane Truck Company is ready to move into full scale production with its Class 7 cab-over-chassis design concurrent with completion of this capital round. Over 60% of the truck’s components are American made and the trucks will be assembled on American soil. The chassis and cab components are provided by Foton in China and the remain-der of the parts are integrated into the trucks.

The engines and power train in the Alkane Class 7 trucks can deliver the same torque found in diesel engines at a fraction of the cost of op-eration. Federal and State governments have created tax incentives and alternative fuel grants to promote the purchase and use of these type of alternative fuel vehicles. This truck will be best utilized for short-haul (200 miles per day) deliveries and can be effective in various applica-tions like box delivery, beverage delivery, propane bobtail delivery and more.

The Alkane Class 7 truck currently comes equipped with a PSI 8.8 liter engine with a durability-tested Bi-Phase liquid injection propane fuel system. The Class 7 trucks will utilize the robust 3500 Series Allison transmission to transfer power to ground. With this round of capital, Alkane will also be incorporating an op-tional Cummins Westport 8.9 liter Near Zero NOx natural gas engine which has been EPA/CARB certified. This engine produces 90% less NOx emissions than the current EPA standard and is receiving signifi-cant recognition and grant support.

COMPANY products

Alkane produces the only cab-over Class 7 truck in America in the 26,000 to 33,000 GVW weight classes powered by liquid propane. The cab-over design is useful for deliveries in congested areas due to its tight turn radius and maneuverability.

CLEAN BURNING COMPRESSED NATURAL GAS

CLEAN BURNING liquid propane

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Alkane Class 8 TruckThe Alkane Class 8 natural gas-powered cab-over-chassis is our entry into the mid to long haul trucking market. Based on securing the targeted funds in this capital round, we expect to complete DOT, EPA, and CARB certification testing by mid-2018.

Alkane’s Class 8 cab-over heavy-duty tractor is clean burning and ma-neuverable in congested areas. It is anticipated that the CumminsWestport Near Zero Low NOx 12L engine will be EPA/CARB certified in time for incorporation into the Alkane Class 8 truck. This natural gas engine will be used in CNG, LNG, or RNG fueling configurations with the Eaton 10 speed automated manual transmission.

COMPANY products

Alkane will enter the long-haul trucking market in 2018 with its Class 8 cab-over-chassis design. The cab-over-chassis designs are especially beneficial with ease of maneuverability and tighter turn radius. They also offer ease of access to the engine

CLEAN BURNING COMPRESSED NATURAL GAS

CLEAN BURNING LIQUID NATURAL GAS

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Alkane’s approach to sales and service will be signing up a network of existing truck dealerships that have an established business and are committed to expanding their alternative fuel truck business. For those customers demanding a direct house-account relationship with Alkane, we will employ in-house commissioned sales managers to meet that customer need.

Over the past several years, we have contacted over 100 dealerships in the U.S., Mexico,and Canada that have shown an interest or signed a conditional MOU to capture a certain geographical region.

We have recently completed our latest version of the Alkane Dealer Agreement. To become an Alkane Dealer, the dealer agrees to: a) purchase 2 trucks per month after an initial ninety-day marketing introduction period; b) inventory parts; and c) provide both sales and service to their installed customer truck base. Alkane will provide adequate training to each dealer’s certified mechanics for servicing and repairs as necessary.

Alkane Truck Company provides industry standard warranty cover-age on the vehicle, powertrain and transmission. In-warranty and out-of-warranty programs will be managed through Alkane’s Sales and Service network.

sales and service of alkane vehicles

Alkane has discussed Dealer Agreements with over 100 dealership locations in the U.S., Canada, and Mexico with new dealer inquires occurring every month.

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Management & Ownership BiographiesBob Smith–Founder, CEO (Alkane Truck Company/Corepower USA) Mr. Smith has a degree in Computer Science from Columbia Commercial College and has served as President of three successful companies: banking software development and implementation, factory building micro computers and software development for the first pre-paid cellular telephone platform. Mr. Smith has over 30 years of experience in the import/export industry and has traveled worldwide throughout China, Russia, CIS, Central America, Mexico and South America. Mr. Smith has the necessary business skills to direct the operations of Alkane Truck Company, with primary emphasis on streamlining operations, continued develop-ment of the latest technologies and efficient implementation of those technologies.

Miguel H. Pena–Plant Operations Manager and AdvertisingMr. Pena studied International Business at Universidad de Belgrano in Buenos Aires, Argentina, where he specialized in International Trade. With experience in the Latin-American market/Spanish-speaking community, he has worked directly for our subsidiary, Alkane Motors Dominicana, as a General Manager. While fulfilling his role in creating the distribution network for our company’s vehicles and brand positioning, he established three dealer locations as well as introduced Alkane’s Class 7, 4x4 Mako Pickup and 16 Passenger Maxi-Van into the Dominican market. Prior to working for Alkane Motors Dominicana, Miguel oversaw an industrial mining operation. He was the general manager of two aggregate mines, as well as a family- owned dimensional stone manufacturing facility. He supervised managers, dealt with customers, created and maintained a budget and met production timelines. After arriving in the U.S., he spent over a year learning about the Alkane products, distri-bution channels and sales.

Lyle Jensen– Strategic Planning and AdvisoryJoining Bob on Alkane’s Strategic Advisory Board is Lyle Jensen from JSTAR Indus-tries. Mr. Jensen is an alternative fuel industry pioneer and former founding CEO of American Power Group which remains the market leader in EPA/CARB certified natural gas conversions of Class 8 heavy-duty trucks and off-highway high-horse-power diesel engines in the U.S., Canada, and Latin America. Prior to American Power Group, Mr. Jensen achieved a progressive career in senior executive leadership roles in various growth industries including avionics, electronic contract manufactur-ing, automotive after-market services, and tire recycling with emphasis on operation-al leadership, business development, brand recognition, and financial performance. His business experience includes venture capital start-ups, second-phase growth funds, small-cap public companies, and strategic business units of Fortune 500 multi-national corporations.

Bill Holcomb – National Sales Director Mr. Holcomb has achieved a distinguished career at every sales and management level of an automotive and truck dealership. He was former part owner of several General Motors Franchise Dealerships and then had a progressive twelve-year career with Hendrick Automotive Group, one of the most influential dealers in the automo-tive world. Mr. Holcomb is in the Chevrolet Hall of Fame and was the Leading Zone Truck Sales Leader for multiple years.

Ownership, Management & Personnel

miguel péna OPERATIONS MANAGER

bob smithFOUNDER AND CEO

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lyle jensenSTRATEGIC PLANNING AND ADVISORY

BILL HOLCOMBNATIONAL SALES DIRECTOR

Ownership, Management & PersonnelManagement & Ownership Biographies

Ricardo Takeo Kuwabara–Chief EngineerMr. Kuwabara is a vehicle design and production team expert with experience in engineering, purchasing, manufacturing, commercial, financial and legal areas. Mr. Kuwabara is responsible for a team of 30 engineers and technicians from design studio to body, electrical, powertrain & chassis engineering. He provides engineer-ing services for all of the company’s products to include delivering the lowest costs, highest quality and best timing in production and development. Mr. Kuwabara is fluent in Portuguese, English, German and Spanish. He has basic working knowledge of Japanese, French and Italian, providing the company better communications with engineering counterparts in our supply chain.

Sandro Stedile Angeli–General ManagerAs a shareholder of the Stedile Group, owners of the Agrale manufacturing facilities in Brazil, Mr. Stedile joins Alkane Truck Company to introduce the Agrale products to the USA market. With MBAs in both business administration and international business, Mr. Stedile adds valuable expertise to the management of Alkane Truck Company’s assembly and distribution operations. In recent years, he has increased revenue by over 20% for one of the Stedile Group companies in Brazil, and imple-mented cost saving processes that have generated over $1 million U.S. in savings for Agrale, Brazil. Mr. Stedile has a Masters Degree in Business Education Administra-tion, a Masters Degree in International Business and a Bachelor’s Degree in Business Administration.

Mary Henderson—Executive AdministratorMs. Henderson has an extensive background in business management, having worked in the shipping and aviation industries, hospitals, medical offices, social ser-vices, insurance and publishing in several states. A licensed private pilot, Mary served as the Staff Pilot for Apex Aviation, an FBO in Westerly, Rhode Island. Mary also served as the Circulation Manager for both American Art Review and Southeastern magazines, published in southeastern Connecticut and as a copy editor and proof-reader for Capital City Press in Montpelier, Vermont. She has spent the bulk of her career as a managerial assistant to executives in a vast array of businesses, handling all manner of strategic responsibilities. Her focus on detail, time manage-ment, customer service and her expertise in editing and proofreading make her an asset as the Executive Administrator at Alkane Truck Company headquarters.

Kristin Ashley Smith—IT and Web Development and DesignMs. Smith attended Coastal Carolina University and majored in Applied Sciences. Her expertise is in web development design, computer language coding and search engine/site optimization. Kristin contributes to the Marketing and Advertising ef-forts of everyday Alkane activities. She is instrumental in researching and obtaining effective software and programs that optimize the company’s functionality. Kristin also uses her journalistic skills in the creation of blogs and press releases as well as proofreading and editing. Alkane Truck Company staff relies on Kristin for everyday technical support, maintenance and software/hardware compatibility.

MARY HENDERSONEXECUTIVE ADMINISTRATOR

KRISTIN ASHLEY SMITHIT AND WEB DEVELOPMENT

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SANDRO STEDILE ANGELIGENERAL MANAGER

RICARDO TAKEO KUWABARACHIEF ENGINEER

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Triad Services Group, Inc. has provided a ground-up solution for the Class 7 truck, from concept to full OEM production. Triad has a proven track record of developing engineered vehicle products that achieve all final delivery expectations and meet all regulatory requirements. Triad will be contracted to complete the same scope of work on the Alkane Class 8 truck.

Foton/Daimler is a manufacturer of trucks. On June 16, 2015, the World Brand Summit released the 2015 (12th) list of China’s 500 Most Valuable Brands. Foton ranked 1st in commercial vehicles in the domestic industry, with a brand value of 80.936 billion yuan (13.4 billion U.S. dollars), a growth rate of 20 percent for five consecutive years and was reaffirmed as China’s No.1 commercial vehicle brand for the 11th consecutive year. Located in Beijing, China, Foton produces over 700,000 trucks per year. Power Solutions International (PSI) is an engine manufacturer located near Chicago, Illinois. PSI is the leader in alternative fuel engine development and the leading cleantech manufacturer and supplier of industrial and on-road engine and power solutions.

Bi-Phase Technologies is an electronic fuel-injection system manufacturer. Formerly a privately-held subsidiary of Schwan Foods, Bi-Phase has been proven and durability tested with millions of miles of LPG road use. Cummins is more than just an engine business; it’s a global power leader.Cummins is organized around four business segments: Engine, Power Gen-eration, Components Business and Distribution, providing products and service to customers in more than 150 countries. A technology leader in the diesel engine market, Cummins has successfully provided cutting-edge solu-tions to the daunting challenge of producing cleaner-running engines.

Agrale is a Brazilian manufacturer of military vehicles, commercial vehicles, engines and agricultural tractors. Agrale will furnish Alkane with the chas-sis and frames for the Alkane Dominator™. Established in 1962, Agrale has become the sole supplier of military vehicles to the Brazilian government. To date, Agrale has manufactured and produced nearly one million products. In addition to the Brazilian military, Agrale supplies vehicles for the U.N.

LINE-X® is the industry leader in truck bed protection offering specially formulated polymers that permanently bond to a truck’s body protecting it from just about anything. As one of the nation’s leading providers of spray-on protective coatings, LINE-X® products are utilized in commercial, industrial, agricultural, military and custom applications.

Core Power (Fujian) New Energy Automobile Co., Ltd. is located in Sanming City Yongan Pu Ling, Fujian, China. Their new manufacturing facility will consist of 3.5 million sq. ft., and include stamping, welding, painting, assembly process, and four major automobile manufacturing pro-cesses. A total investment of $500 million is expected to produce an annual output of 300,000 units of new energy electric vehicles.

alkane’s quality partners

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Future Projects in the Pipeline

1. Fund the initial launch of the Class 7 LPG revenue stream $1.0M—$1.5M – Complete Components and Maintenance Service Manual – Target funding of 10-12 trucks per month with a 2-3 month inventory pipeline. – Sell inventory to new U.S. Alkane Dealers placing initial orders – Coca Cola expressed interest in ten trucks to launch in California (high profile state) – Mexico dealers and strategic business partners are taking steps to commercially register Alkane in Mexico. – Canadian interest in signing up dealers in Quebec, Ontario, BC, and AB. – Alkane’s contract assemblers will use their financial resources to ramp growth.

2. Fund the commercialization of the Alkane Class 7 Near Zero NOx Natural Gas Truck $0.4M – Certify/test using the Cummins Westport 8.9 liter Near Zero (Z) natural gas engine – Near Zero NOx engine is of huge interest in California and will spread from there. – Near Zero NOx engine can also use RNG which has a negative carbon footprint. – Funds are primarily for two engineering groups to perform third-party DOT testing.

3. Fund the certify/testing of Alkane’s Cab-Over-Chassis Class 8 Natural Gas Tractor $.08M – Will use the EPA/CARB certified Cummins Westport 11.9 liter natural gas engine – Eligible for diesel emission reduction programs in the U.S., Canada, and Mexico – Funds are primarily for two engineering groups to perform third-party testing.

4. Financing Costs / Working Capital Contingency $0.3M

Total Targeted Capital Raise For This Class 7 and Class 8 Phase: $2.5M—$3.0M

USE OF PROCEEDS

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NORTH AMERICA is experiencing a strong movement towards the use of greener, less-polluting fuels and the urgent need for energy independence. Alkane Truck Company is positioned to meet that challenge.

The Alkane financial model is based on a niche business strategy focused on custom-ers who have mandatory clean air regulations to meet or have elected to take actions to improve their sustainability and carbon footprint environmental objectives. Federal, state, and local governments are offering incentives to fleets that reduce their depen-dence on diesel fuel and its harmful emissions by converting to alternative fuel vehicles. The timing is right for Alkane’s alternative fuel product lines to help meet these clean air objectives.

Alkane Class 7 RevenueAlkane is ready to immediately launch their Class 7 liquid propane fueled truck con-current with this capital round. We have verifiable interest from the U.S., Canada, and Mexico/Latin America. U.S. Dealers are standing by and ready to sign Dealer agree-ments once we have assured them the Class 7 LPG production pipeline from China to the U.S. is being filled with product. Expected sources of revenue for the Class 7 truck are as follows:

1. Initial Inventory Quantities For New Dealers. After a 90 day introductory marketing period, the Alkane Dealers are contractually required to purchase two trucks per month to retain their dealership region. For every ten Dealers, that equates to 240 revenue units per year.

2. VW Mitigation Trust Fund. Volkswagen was caught cheating the EPA/CARB certification system and has agreed to a court settlement of $2.7 billion dollars for projects that will reduce diesel related emissions. These funds will be used to upgrade or replace aging diesel powered vehicles with new and clean burning engines. Alkane is perfectly positioned to become active in multiple U.S. opportunities projected to begin in early-2018.

3. U.S. Corporate Sustainability Programs. There are many U.S. corporations that have documented sustainability and carbon footprint reduction programs. Logistical movement of goods and services is a major source of pollution for many of these companies. Moving to alternative fueled vehicles is becoming a growing requirement if a fleet wants to continue their business relationship with a sustainability customer.

4. Canada Clean Air Programs. Provincial funded fleet incentive programs are being launched in Quebec, Ontario, BC. A team from Quebec traveled to the Alkane Truck Company corporate headquarters in early-August 2017 to express their interest in bringing Alkane products to their province.

5. Mexico and Latin America. The 2016/2017 deregulation of government fuel subsidies and the governmental imposed delivery restrictions due to poor air quality in the inner cities are major drivers in Mexico for fleets to begin the conversion away from diesel fuel and adoption of alternative fuels. Countries like Columbia have also requested quotations from Alkane.

alkane FINANCIAL MODEL

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Alkane Class 7 Revenue (continued)In addition to Alkane’s Class 7 liquid propane engine product line, we want to launch an additional Class 7 truck line utilizing the latest CNG engine technology. The first addressed market for this engine will be California:

Following is a table of projected revenue range results that Alkane management believes are achievable with today’s market conditions and are made on a “best estimate” basis:

Units and Revenue: 2018 2019 2020 2021 2022

Class 7 Units:

U.S. LPG Engine 120-180 240-360 420-540 600-720 780-900

U.S. Near Zero NOx Engine In Test 60-120 180-240 300-360 420-480

Canada 60-90 120-150 180-240 300-360 420-480

Mexico 60-90 120-150 180-240 300-360 420-480

Total Projected Units/Year 240-360 540-780 960-1260 1500-1800 2040-2340

Avg Units Per Month 20-30 45-65 80-115 125-150 170-195

Projected Class 7 Revenue $19m-$28m $42m-$62m $76m-$99m $118m-$142m $161m-$185m


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California Near-Zero NOx and Renewable Natural Gas (RNG) Programs. Some of the worst air quality conditions in America are in the popu-lous regions of California. From the Governor to CARB (California Resources Board) to the handful of Regional Air Quality Districts, millions of dollars are being invested in technologies and products to improve their air quality before they face threatened cutbacks in federal support. Reducing diesel related emissions (NOx and Particulate Matter) with alternative fuels is #1 on their list. A key revenue generation project for Alkane is to incorporate the newCummins/Westport ISL G Near Zero (NZ) NOx natural gas 8.9 liter engine into Alkane’s Class 7 chassis. This game-changing EPA/CARB certified natural gas engine’s emissions are 90% lower than the current EPA NOx standard and the ISL G NZ meets the 2017 EPA greenhouse gas emission requirements with a 9% GHG reduc-tion. Part of the “Use of Proceeds” is proposed to incorporate and launch an Alkane Near Zero NOx Class 7 natural gas truck which will be attractive in reducing harmful emissions in high-smog laden cities in California, Mexico, and other metropolitan areas.

From the Governor to CARB (Califor-nia Resources Board) to the handful of Regional Air Quality Districts, millions of dollars are being invested in technologies and products to improve their air quality before they face threatened cutbacks in federal support.

Los Angeles Smog

Alkane Class 8 RevenueThe Alkane Class 8 cab-over-chassis with a natural gas-powered engine is our entry into the long-haul trucking market where sustainability objectives are a priority in reducing diesel powered trucks with their health harmful emissions. A portion of the “Use of Proceeds” is allocated to this Alkane product line that can be brought to market within ten to twelve months of funding after we complete the DOT compliance testing with the latest EPA/CARB certified Cummins Westport 11.9 liter natural gas engine. Since Alkane’s Class 8 truck is a cab-over design, it has a tighter turn radius and is more maneuverable in congested inner-city areas. With Alkane’s unique “knock-down” component assembly business model, we believe we can deliver the lowest priced Class 8 CNG truck in the market. For revenue projection purposes, we have combined the unit volume and stayed conservative until more discussions have been held with Dealers and customers, especially in Mexico and Canada where we believe this truck will be particularly attractive. Here is Alkane’s management’s “best estimate” Class 8 revenue projection:


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*Total existing capacity of the three contract assemblers that Alkane is considering totals over 300 units per month without any new facility expansion. Alkane will have dramatic revenue expansion capacity using third-party assets and working capital to meet the market demand.

*These revenue projections exclude the Alkane Dominator and CorePower USA products lines which are in the next phase of Alkane’s strategic plan.

Los Angeles Skyline

The chart below shows Alkane’s management’s “best estimate” Class 8 revenue projection:

The chart below shows Alkane’s management’s “best estimate” grand total revenue projec-tion for both truck types:

Units and Revenue: 2018 2019 2020 2021 2022

CLASS 8 UNIT RANGE/ YEAR IN TEST 120-180 300-360 420-480 540-600

AVERAGE UNIT RANGE/MONTH NA 10-15 25-30 35-40 45-50

Projected Class 8 Revenue IN TEST $18m-$26m $44m-$53m $61m-$70m $79m-$88m

GRAND TOTAL ALKANE PROJECTED REVENUE RANGE 2018 2019 2020 2021 2022

Class 7 $19m-$28m $42m-$62m $76m-$99m $118m-$142m $161m-$185m

Class 8 In Test $18m-$26m $44m-$53m $ 61m-$ 70m $ 79m-$ 88m

Grand Total $19m-$28m $60m-$88m $120m-$132m $179m-$212m $240m-$273m

Average Units Per Month*

Class 7 20-30 45-65 80-115 125-150 170-195

Class 8 NA 10-15 25- 30 35- 40 45- 50

Total 20-30 55-80 105-145 160-190 215-245

Alkane Class 8 Cab Over Tractor

Cost of Goods Sold and Gross ProfitCost of goods sold is comprised primarily of purchased components, the contract as-sembler overhead to purchase, receive and kit the components and the actual labor and overhead cost to assemble the components into the final completed truck configuration. Here is the current budget to calculate the unit gross profit. With additional volume, we believe the cost of components will continue to come down.

Operating ExpensesUsing Alkane’s unique “knock-down” production model with capable third-party con-tract assemblers will enable Alkane’s head count to remain small and focus primarily on product development, business development, and sales support. Total head count to support the Class 7 and Class 8 revenue above is projected to be less than a dozen employees. Operating expenses as a percent of revenue are budgeted at 9% of revenue in the early years of the five-year plan and drop to 5% of revenue in the out-years.

Projected Pre-Tax Income Following is Alkane’s projected pre-tax income by percentage and then a table by dollars:


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CLASS 7 LPG CLASS 8 CNG

COGS PARTS $47,600 $95,000

purchasing/assembly $13,500 $22,000

Shipping/Other $1,900 $3,000

total costs $63,000 $120,000

ALKANE SELL PRICE TO DEALER $78,950 $149,950

GROSS PROFIT $15,950 $29,950

GP % 20%* 20%*

*Alkane expects an annual improvement in gp each year with improved operational efficiencies

and lower costs due to higher volumes.

CALENDAR YEAR 2018 2019 2020 2021 2022

Revenue 100% 100% 100% 100% 100%

Gross Profit 20% 21% 22% 22% 23%

Operating Expenses 9% 7% 6% 6% 5%

Pre-Tax Profit 11% 14% 16% 16% 18%

Cab-Over Chassis

Improved EPA/CARB Certified 8.8L

Upgraded 3500 Series Allison Transmission

Projected Pre-Tax Income


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CALENDAR YEAR 2018 2019 2020 2021 2022

Revenue Range $19m-$28m $60m-$88m $120m-$132m $179m-$212m $240m-$273m

Revenue Mid-Point $: $ 22.5m $74.0m $126m $195m $256m

Gross Profit (%) 20% 21% 22% 22% 23%

Gross Profit ($) $ 4.5m $15.5m $27.7m $42.9m $ 58.9m

Operating Expenses (%) 9% 7% 6% 6% 5%

Operating Expenses ($) $ 2.1m $5.2m $7.6m $11.7m $12.8m

Pre-Tax Profit (%) 11% 14% 16% 16% 18%

Pre-Tax Profit ($) $ 2.4m $10.3m $20.1m $31.2m $46.1m

CALENDAR YEAR 2018 2019 2020 2021 2022

Pre-Tax Profit ($) $ 2.4m $10.3m $20.1m $31.2m $46.1m

Valuation: Assume 5X Pre-Tax $12.0M $51.5m $100.5m $156.0m $230.5m

25% Ownership for $3m investment $3.0M $12.9m $25.1m $39.0m $57.6m

Investment Multiple on $3.0m 1.0X 4.3X 8.3X 13.0X 19.2X

Return On Investment Each prospective investor has their own way of viewing their IRR for time and money. For illustration purposes, here a simple 5X pre-tax then-year valuation for a $3m investment and 25% ownership in Alkane Truck Company. Should be a very favorable return to meet any investor’s objectives:

Closing Comments - Why Alkane Truck Company?

1. Ready to launch and commercialize Class 7 LPG revenue immediately. 2. Strong market demand coming from Canada, Mexico, and the U.S. 3. Unique “knock-down” production kit provides a competitively priced alternative fuel truck. 4. Well capitalized market leader contract assemblers provide a scalable production model. 5. Right Place At The Right Time!

Please Contact: Robert Smith [email protected] PH: 843-424-8940 Lyle Jensen [email protected] PH: 515-468-9631

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