INVESTOR PRESENTATION OCT-2015 - Quantum …qsinano.com/wp-content/uploads/2016/09/QSIM-Chemicals-Investor... · INVESTOR PRESENTATION OCT-2015 ©2015 QuantumSphere, Inc. ... •Chairman

INVESTOR PRESENTATION OCT-2015

©2015 QuantumSphere, Inc. (QSI) All Rights Reserved.

OTCQB: QSIM

Kevin MaloneyChairman & CEO

949-378-9851

[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. No

agreement 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 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

15% Energy savings

QSI Technology can add up to $45 Billion in Annual Output to the World’s Most Critical Chemicals…

• Ammonia

• Methanol

• Olefins

QSI is Transforming the Chemicals Industry

PAGE 3

• QSI products “turbo-charge” chemical production efficiency

• Lead chemical: Ammonia

~$100B market - critical to servicing global food supply

• Typical ammonia plant can add ~$80M of output for a ~$4M

investment in QSI technology – 100’s of plants globally

• Technology commercially validated in Q1, 2015

10-15% production increase in commercial plant

(5% is considered a “game-changer”)

• Commercial validation motivated Casale to execute JDA

Global leader servicing ~40% of ammonia production

Casale is driving final stages of QSI commercialization

• ~$100M annual revenue potential at 60%+ gross margin

• Volume production capacity in place – backed by extensive IP

• QSI is poised for profitable growth, commencing in 2016

QuantumSphere

OTCQB: QSIM

Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM

• ~$100B Global Market; ~200M Tons Annually

• Most Critical Chemical Developed in the 20th Century

~82% of Ammonia Used for Agricultural Fertilizer

Quadrupled Productivity of Agricultural Land Use

Enabled Global Food Supply and Population Boom

• Responsible for:

~50% of All Protein Consumed on the Planet

~2% of Global Carbon Dioxide Emissions

• Consumes:

~2% of World’s Energy Supply

~5% of World’s Natural Gas

QSI’s FeNIX Technology Can Significantly Increase Chemical Plant Revenue & Profits:Up to $10B in additional global output in~600 existing ammonia plants worldwide

PAGE 4

Focus on Ammonia - Impact & Opportunity


“Turbo-Charging” Ammonia Production

PAGE 5

Standard ammonia catalyst coated with

QSI’s FeNIX Nano Catalyst Accelerator

FeNIX Nano catalyst accelerator

loaded into existing ammonia

converter


FeNIX improves ammonia plant efficiency 10-15%;

~$4M investment can translate to ~$80M

in additional production revenue

over the life of the catalyst.

FeNIX™High Performance

Catalyst Accelerator

Partnership Executed with Industry Leader

PAGE 6

• 2015 JDA with QSI covers

ammonia, methanol, others

• Global leader in ammonia

production technologies

• Casale technology utilized in:

~40% of global ammonia &

methanol production

• QSI is exclusive provider of

nano catalysts to Casale


Casale converter technology critical

to global ammonia production ~600 ammonia plants worldwide can

benefit from increased production efficiency

Casale is Driving QSI Commercialization

PAGE 7

Conservative industry requires key partner and multi-year/multi-step

process for developing and commercializing new technologies

• Multiple forces are driving the need for higher plant efficiencies

• QSI commercialization process now in final stages, led by Casale

• Commercialization Process:

Internal Lab Validation – QSI (2009 – 2013)

External Lab Validation – China (2014)

Co Completed Manufacturing Facility – QSI (2014)

Commercial Ammonia Plant – China (2015)

External Labs – Europe (In Progress)

Initial Commercialization in a Casale Reactor – (Q1-2016)


PAGE 8HIGH PERFORMANCE NANOCATALYST PLATFORM TECHNOLOGY // STRICTLY CONFIDENTIAL. NOT FOR DISTRIBUTION. OTCQB: QSIM

Total Market:

~$100B

Total Available Market (TAM):

~$250M

QSI Annual Revenue Potential: ~$100M(Expected Revenue Access Through

Casale Partnership Upon Final Commercial Validation)

•~60 plant refurbishments per year

•~40% of world’s ammonia pr

QSI Ammonia Revenue Model

• ~600 ammonia plants

in operation worldwide

• Up to 10% or ~60 plants

are refurbished each year

• ~40% of global ammonia

production utilizes Casale

reactor design technologies

• Up to ~25 Casale plants

are refurbished each year

• ~$4M per plant revenue to

QSI for FeNIX (on average)

• ~$100M annual revenue

potential requires ~$20M

CapEx investment

PAGE 9

FeNIX Nano Catalyst

Accelerator Technology

Leading Ammonia

Technology Providers

Leading Ammonia

Catalyst Providers

Dominant Commercial

Ammonia Producers

Ammonia Industry Leaders – Value Chain

Casale

JDA


QSI’s FeNIX catalyst accelerator technology offers a significant competitive advantage

to leading ammonia technology & catalyst providers

Ammonia Value Proposition

PAGE 10

100’s of ammonia plants globally could benefit from QSI technology

• Demonstrated 10-15% Increase in Ammonia Catalyst Activity

2015 commercial validation; 5% considered significant

• Strong ROI & IRR for Ammonia Producers

based on increased production and/or energy savings


For Every

$1MInvestment

in FeNIX

~$20MIn Production

Revenue

~$4MIn EnergySavings

OR

FeNIX ValueProposition:

~25%

Of the

Market

~75%

Typical Ammonia Plant Example:

~$4M investment in FeNIX can

deliver up to $80M of additional

revenue over the catalyst life.

The FeNIX value proposition can

translate to billions in annual

profits for ammonia plant owners

and operators, globally.

Delivering Shareholder Value

QSI Profit Economics

• Gross Margins: 60%+

QSI Production Capacity

• Current Manufacturing Facility:

Ability to Service 2–3 Typical, Mid-Sized Plants per Year

$10-20M in Annual Revenue Potential* *Dependent on production increase vs. energy savings

• Economically Scalable Manufacturing Facility:

~$20M CapEx Investment Can Deliver

up to $100M in Annual Ammonia Revenue


Patented High-Volume Production

PAGE 12

Economically Scalable | Highly Automated | Extensive IP

Inputs Vaporize Passivate Package

STEP

1STEP

2STEP

3STEP

4


QSI Core Manufacturing Process

Covered by U.S. Patent No: 7,282,167

FeNIX™ Nano Catalyst Accelerator


Existing Commercial

Iron (Fe) Catalysts FeNIX™ Applied as Coating to

Commercial Iron (Fe) Catalysts

FeNIX™ Iron (Fe)

Nano Catalyst Accelerator

FeNIX™High Performance

Catalyst Accelerator

Technology Backed by Extensive IP

PAGE 14

• Backed by 9 issued patents

and 3 pending applications

• 12 years of “know-how” and IP

• High surface area Nano FeNIX

increases efficiency and output

• FeNIX applied as coating onto

existing standard catalysts*

• 12kg drum of FeNIX will coat

800kgs of existing catalysts

FeNIX Nano Catalyst Accelerator Packaged in 12kg Metal Drums

High Surface Area FeNIX Nano Catalyst Accelerator

Commercial Iron (Fe) Catalyst for Ammonia Synthesis - UNCOATED

*Commercial Iron (Fe) Catalyst for Ammonia Synthesis - COATED

with FeNIX Nano Catalyst Accelerator


Large Pipeline of Chemical Opportunities

PAGE 15

QSI may ultimately improve many chemical processes

Olefins

Methanol

Ammonia FilterMethanol

Olefins

Ammonia

Ethylene Oxide

Fluid Cat Cracking

Hydro-processing

Bio-RenewablesPoly-olefins

Fischer-Tropsch

Hydrogen

Polyurethanes Syngas

Sulfur Recovery

Methanation

More… Parafins

~$1.5 Trillion USD in Basic Chemicals Produced Annually

• Up to 90% of all Industrial Processes Utilize Catalysts

---------------------------

Account for

Nearly 1/3 of

Basic

Chemicals

Produced;

~$450B USD

--------------------------


~$2B Total Available Market

PAGE 16

Total Market: ~$100B ~$300B ~$50B

Total Available

Market (TAM):~$250M ~$1.5B ~$250M

QSI Addressable

Market*:~$100M ~$300M+ ~$50M+

End Products: Agricultural Fertilizer Polymers, Plastics Paint, Adhesives, Fuels

Product Status:Initial

Commercialization

Lab Validations

in Progress

Lab Validations

Pending

C2-C4NH3CH4O

Ammonia MethanolOlefins


*QSI Addressable Market based on blend of increased production and

energy savings, plants directly accessible through Casale partnership.

d

Target Objectives and Next Steps

PAGE 17

QuantumSphere

OTCQB: QSIM

OPERATIONAL

• Execute commercial agreements with

additional industry-leading partners

• Complete follow-on commercial reactor

validation utilizing Casale technology

• Secure purchase orders via existing Casale

channels for FeNIX ammonia catalyst sales

• Further validate follow-on nano catalyst

accelerator products for Methanol and Olefins

• Continue to expand production capabilities to

meet demand and protect IP


Public Company Background

PAGE 18

• Founded in 2002 as an R&D company

Focused on industrial chemicals sector

• Became publicly traded in 2014; QSIM

• ~$32M in equity financing secured to date

~$7M in cash from board and management

• Recent Stock Price: $2.00

• Market Cap: ~$45M

• ~22.5M shares outstanding

~5.4M in public float

• Exploring capital options for NASDAQ uplisting

QuantumSphere

OTCQB: QSIM


Management

PAGE 19

Substantial business and technical qualifications to execute QSI strategy

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

Gregory Hrncir, Esq.Chief Strategy Officer &

General Counsel

• 22 years of experience in corporate, securities, M&A and technology start-ups

Steve Gillings, MBAChief Financial Officer

• 30 years of accounting experience at multiple public companies

Matthew Griffith, MBAVice President, Operations

• 10 years of experience in commercialization and development of advanced materials and

clean energy systems

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


Board of Directors

PAGE 20

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 23

Steven Myers

Governance 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, MBA

Strategic 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 and

Compensation 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

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


Technology Advisory Board

PAGE 21

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 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

• 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. 05 through his retirement in Dec. 14


Transforming the Chemicals Industry

PAGE 22

• Platform technology “turbo-charges” chemical efficiency

• Lead chemicals: Ammonia, Methanol, Olefins

~$450B combined annual production

• Compelling value prop for 100’s of chemical plants globally

• Lead technology commercially validated in Q1, 2015

10-15% production increase (5% is “game-changer”)

• Commercial validation motivated Casale to execute JDA

Global leader servicing ~40% of ammonia production

Casale is driving final stages of QSI commercialization

• ~$100M/year ammonia revenue potential (60%+ GP Margin)

• Volume production capacity in place – backed by extensive IP

• QSI is poised for profitable growth, commencing in 2016

QuantumSphere

OTCQB: QSIM


Contact Information

Kevin Maloney, MBA Gregory Hrncir, Esq.Chairman & CEO General Counsel & CSO

949-378-9851 818-400-5930

[email protected] [email protected]

PAGE 23

Contact Info:QSI-Nano Catalyst Production Facility; ~4 Metric Tons per Year Capacity


mailto:[email protected]

mailto:[email protected]

Documents

INVESTOR PRESENTATION OCT-2015 - Quantum …qsinano.com/wp-content/uploads/2016/09/QSIM-Chemicals-Investor... · INVESTOR PRESENTATION OCT-2015 ©2015 QuantumSphere, Inc. ... •Chairman