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Investing in Hydrogen and Fuel Cell Technology

FINANCING THE HYDROGEN ECONOMY

AND FUEL CELL INDUSTRY

Long Beach, CA

Wednesday, May 5, 2010

Presented by: Irvin Barash, President, Vencon, New York

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• Global Economic Externalities affecting Hydrogen and Fuel Cells

• Specialty Economic Growth Opportunities

• Types of Technologies of Interest to the Commercial Markets

PRESENTATION TOPICS

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Global Economic Externalities affecting Hydrogen and Fuel Cells

Global Economic Externalities affecting Hydrogen and Fuel Cells

TOPIC 1

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Financing the Hydrogen Economy Relates to the Story Being Told in Simple Terms...

…And the Name is a Major Element…

…the name, Hydrogen Economy, is perplexing to many…Is Hydrogen a source of currency??…Is

the world a Silicon Economy?

WHAT IS THE HYDROGEN ECONOMY???

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•A 1940’s movie- - Jimmy Stewart wanted to leave banking for solar energy…it was a dream then, but didn’t catch on.

•A 1940’s talkie, Charlie Chaplin poo-pooed an investment in “Pacific Ocean Power” an ocean energy tech.

•A major problem is that investors are confused- -DON’T CONFUSE INVESTORS

WHAT IS THE “LABELING” OF THE INDUSTRY, ALSO CALLED GREENTECH AND CLEANTECH

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•Alternative Energy has been around for centuries…that’s what is confusing.

•What is the investor/public to understand regarding hydrogen and fuel cells, even energy storage is a different

category

•To attract the substantial investment needed, the Hydrogen Economy must have the alluring “spin”, for one.

ACTUALLY, IT HAS….

HYDROGEN AND FUEL CELL BUSINESSES SHOULD BE ONE OF THE LEADING GROWTH AREAS IN THIS DECADE

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World Wide Security related markets facing major adjustment to terrorism

Global Market Growth for ElectricityReduction of oil importsGlobal climate changeFossil Fuels Depletion

Power Generation Dislocations

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•Attracting Substantial Private Equity Investors to Existing and New Hydrogen Related Businesses...

…Despite the many Developmental and Infrastructure Issues reflective of a Growing Industry.

•Worldwide about 4000 organizations are involved in fuel cells, hydrogen energy and related technology

FINANCING HYDROGEN AND FUEL CELLS COMPANIES REGARDS...

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Specialty Economic Growth Opportunities

Specialty Economic Growth Opportunities

TOPIC 2

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•BECAUSE IT IS THE RISK CAPITAL FOR THE SUCCESS OF EMERGING COMPANIES

•EQUITY CAPITAL IS THE BACKBONE NEEDED FOR BANK LOANS TO BE AVAILABLE

•PRIVATE EQUITY REGARDS FINANCIAL AND CORPORATE INVESTORS

•GOVERNMENT INVESTMENT IS HELPFUL

GROWTH OPPORTUNITIES RELATE TO INVESTOR INTEREST

WHAT DO INVESTORS LOOK FOR?

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RETURN ON INVESTMENTSUPERIOR MANAGEMENT

POPULAR INDUSTRY STORYLARGE MARKETS

NEAR TERM PROFITABILITY,

LESS IMPORTANT

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2001 2002 2003 2004 2005 2006 2007

1 2 3 4 5 6 7

Begin Partial Stage Complete End Complete

Renewable Energy ModelTECHNOLOGY VENTURES GROWTH STAGES

VENTURE STAGE DESCRIPTION

STAGE 0:IDEA/CONCEPT

STAGE 1:R&D

STAGE 2: INITIAL MARKETING PLAN

STAGE 3: FORMATION OF COMPANY

STAGE 4:BUSINESS TEAM AND PLAN

STAGE 5:MARKETING DEVELOPMENT/PARTNERING

STAGE 6:COMMERCIALIZA- TION

1/01

11/04

9/04

11/04

PRE-SEED STAGE

.

Patents Bench Scale

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Business Plan

SEEDSTAGE

DEVELOPENT STAGE:PRE-COMMERCIAL

VENTURE STAGES, Vital to Understand

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STAGES OF VENTURE GROWTH

STAGE 0:: IDEA/CONCEPTSTAGE 1: R&D ALSO REFERRED TO AS PRE-SEEDSTAGE 2: INITIAL MARKETING STAGE 3: COMPANY FORMATIONSTAGE 4: BUSINESS TEAM AND PLANSTAGE 5: MARKETING DEVELOPMENT/PARTNERING STAGE 6: COMMERCIALIZATION

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Opportunities- - “convergence” wave as the industry grows.Combine companies which serve the same market, and

access a common customer base. Many companies are one product businesses without the

proper management, well thought out strategies and vision to be successful as the dynamics of the industry change.

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STRATEGIES FOR ATTRACTING INVESTORS

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Consider Acquisitions to add other ProductsUndertake Strategic Partnering

Access the billions of customers in developing nations.

Should the Hydrogen Economy be called a different name?

STRATEGIES

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POSSIBLE BENEFITS FOR PRIVATE/CORPORATE INVESTORS

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Types of Technologies of Interest to the Commercial Markets

Types of Technologies of Interest to the Commercial Markets

TOPIC 3

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Hydrogen Production

(including membranes, catalysts, coal based)

Photolytic Water SplittingRenewable ElectrolysisBiological and Biobased

Ultra-High-Temp. Thermalochemical

Systems (Solar)Distributed Reforming

OPPORTUNITIES

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Hydrogen Storage

Physical Storage

Metal Hydrides

Carbon-Based Materials

Chemical Hydrogen Storage

Novels Materials & Concepts

OPPORTUNITIES

Hydrogen DeliveryLiquefaction

Pipelines

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USE EXAMPLE FINANCING

TECHNOLOGY Biofuel/Hydrogen PRIVATE EQUITY

PRODUCTION Centralized CONVENTIONAL

DELIVERY Centralized CONVENTIONAL

STORAGE Centralized PE/ CONVENTIONAL

CONVERSION Fuel Cells PE/ CONVENTIONAL

FINANCING TECHNOLOGY TYPES

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SUMMARY: LARGEST ECONOMIC TRANSFORMATION EVER

NEW TECHNOLOGY REPLACEMENT

RAILROAD HORSES

GASOLINE ENGINE ELECTRIC VEHICLES

ELECTRIC L IGHT GASLIGHT

TELEPHONE TELEGRAPH

RADIO/MOVIES/TV TEA ROOM STORIES

AIRPLANE SHIP TRANSPORT PLUS

SEMICONDUCTORS SLIDE RULE PLUS

RENEWABLE ENERGY NO REPLACEMENT

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CONCLUSIONS

New Government/ Industrial Corporation NeededMore Entrepreneurs

Private Equity Outreach, as Financing Conferences

Enhanced Strategic Partnering

Enhanced Support for Trade Organizations

Rename segments not based on products or technology, but on markets/applications

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GERMANY: PUBLIC/PRIVATE PARTNERSHIP