Hpev Presentation October 2013
- 1. HPEV, Inc. Thermal Dispersion Technology Solutions Ted Banzhaf President 1 Proprietary & Confidential
- 2. • Motor and Generator manufacturers have a problem – removing heat from equipment efficiently. • Worldwide environmental and environmental & efficiency mandates being implemented now: Three steps: 2013, 2015, 2017 • Active Material is the expensive part of the motor (or generator) that solves both the problems. Less Active Material needed, lower costs, better margins – smaller motors that put out more power can be sold for more! 2 Proprietary & Confidential
- 3. HPEV’s patented technology removes heat better than air cooling or liquid cooling: faster than anything on the market. • Less Active Material required for the same output – Lower Cost • Helps achieve Environmental Mandates HPEV’s patented technology replaces either solution and provides MUCH better performance, and the Environmental mandates are achieved! Cost to Manufacture Output (Horsepower) Sales Price Air Cooled Motor $50,000 1,000 $100,000 HPEV Improved $40,000 1,250 $135,000 Improvement 20% 25% 35% Therefore, because costs have been reduced and a motor that puts out more horsepower sells for a higher price, gross margins will rise by 90% for the manufacturer. Before After Change Gross Margin $50,000 $95,000 90% 3 Proprietary & Confidential
- 4. Status – Where is HPEV now Customers are The Big-8: Emerson, Nidec, GE, Siemens, Regal Beloit, WEG, ABB & Teco-Westinghouse. More than 80% of this $50+ B mkt. Milestones: • 5 issued patents, 12 pending and more patents and trademarks on the way • Channel/manufacturing partnership agreement with Thermacore • Joint Development Agreements with several Big-8 customers • MOU/Commercialization Agreements with two Big-8 customers • Work has begun with one Big-8 customer Company Timeline Raised $1.2M though founders and friends and family LOI/JV with 3-5 of the “Big 8” Internal testing at 3 of the “Big-8” Full production with the “Big 8” majors Discussions with Siemens, Regal $500K investment closed Addressing new markets 2009 2010 2011 2012 Initiated patent filings 3rd party validation of motor Tim Hassett full-time Initial Initiatives with 3 of the “Big 8” motor companies Hassett invests $550k Completed reverse merger 4 2013e 2014e LOI/JV agreement in place with all of the “Big 8” majors Initial production with 3-5 of the “Big-8” Proprietary & Confidential
- 5. History of bringing technology to market Tim Hassett CEO, Chairman & Founder Ted Banzhaf President Mark Hodowanec CTO & Founder Quentin Ponder Vice Chairman 30+ years experience managing and growing mid-sized manufacturing firms: GE, WaveCrest, Hawk Motors, Rockwell Automation • Turned around 2 divisions for Jack Welch at GE • WaveCrest from $0 to $30M in revenues in 18 months (with Mark) • Lemo from $32 to $75M in revs and grew Net Income 22x in 4 years (Mark) • Tim & Mark designed the Mars Rover drive train 15+ years experience in growing public companies in all facets of finance, growth strategies and management. Expertise in maximization of shareholder value and maturing small companies into larger organizations. - SpatiaLight Technologies (NASDAQ:HDTV), CEUT, Raymond James 20+ years of engineering & operations expertise: more than 30 publications & numerous patents. • Led new product innovation at Reliance Electric • Engineering Manager at Siemens Energy and Automation • Led Emerson to API approval – after Emerson’s efforts had failed for 11 years • Mars Rover drive train designer 50+ years experience in management. Baldor Electric Motors, Franklin Electric Motors, GE Noted in the book “World Class Manufacturing: The Next Decade” as one of the 5 best executives for manufacturing improvement pathways in the modern industrial era. Coined the term “Flex Flow Manufacturing” based on his revolutionary manufacturing management techniques. 5 Proprietary & Confidential
- 6. $95+ billion market that is growing 3-5% per year. Addressable segment of that market is about $50 billion. Target Audience>80% of this $50B segment is controlled by the Big-8 Market Challenge The industry hasn’t seen an improvement in costs of more than 5% since the 1950s when (Tim’s father invented the frameless DC motor.) 6 Proprietary & Confidential
- 7. HPEV’s optimal customer: a motor/generator – 50 up to 100,000hp HPEV’s value proposition: reduce the manufacturers’ cost of production, improve performance, & meet environmental standards Potential Customers: • • • • • • • • • Emerson Corporation (NYSE: EMR) Nidec Corporation (NYSE: NJ) Flygt (Sub of Xylem Inc. - NYSE: XYL) WEG Motors (Brazil) GE Power Conversion (NYSE: GE) Siemens (NYSE: SI) Regal Beloit (NYSE: RBC) ABB (NYSE: ABB) TECO-Westinghouse Motor Company Channel/Manufacturing Partner: Thermacore • Leader in Heat Exchangers • Fabricate HPEV technology and sell directly to the OEM • HPEV’s “salesman” to the 200+ motor/generator OEMs 7 Proprietary & Confidential
- 8. HPEV is an Intellectual Property company 1. Upfront license fee to use the technology (1-3 years term) • Expected License Fee to be $1M - $10M depending on factors such as exclusivity (i.e. Emerson), minimum sales requirements and length of license 2. Royalties on revenues from sales = 3% of gross sales 3. Royalty from Thermacore on each sale for the use of HPEV IP Market Strategy: Existing relationships, trade journals and competitive demand. HPEV is already into the design phase of discussions with 6 of the Big-8. When one is in the marketplace, they will all need the technology. Third Party Validation: HPEV has third party validation reports from an industry leading certification firm. Also, at least 3 of the Big-8 have done internal validation. This accounts for the acceleration of their implementation schedules. 8 Proprietary & Confidential
- 9. Motor and Generator Cooling Options Fan Cooled Heat Transfer (W/m2K) Required Accessories 1X Water Cooled Heat Exchanger 1X 4X Pump, Blower/Fan & Pump & Piping Radiator, Fan, Piping Blower, Piping Construction Complex Medium Complex Cost Low Medium-High High Reliability Low (dust particles, filters required) Medium Low (fouling) HPEV 8-9X NOTHING SIMPLE VERY INEXPENSIVE HIGH HPEV wins in EVERY category and reduces manufacturing costs by more than 25% 9 Proprietary & Confidential
- 10. HPEV helps manufacturers remove heat from rotating equipment – heat is the enemy. For motors and generators, the patented technology: • Reduces manufacturing costs by over 20-25% • Improves power output by approximately 25% • Helps manufacturers meet worldwide environmental & efficiency mandates that are being implemented over the next 4 years. • The technology is being commercialized NOW by several of the Big-8 • The addressable market is $50B and we want 3% of every one of those sales. • HPEV has a management team with an excellent track record of driving profitability and bringing products to market. Final thought: more than 60% of all electricity generated in the world is consumed by motors or generators This is just the beginning for the company and 2013 will be a game changing year for the motor/generator marketplace. 10 Proprietary & Confidential
- 11. OTCBB: WARM Thank you for your interest Ted Banzhaf President 415.971.4873 tbanzhaf@hpevinc.com 11 Proprietary & Confidential