SUSTAINABLE CHEMISTRYENVIRONMENTALLY ACCEPTABLE AND SUSTAINABLE COMPOSITE MATERIAL

$45 B/ YEAR MARKET $2.4 B/ YEAR REVENUE

THE TEAMPrinciple TeamAkshay Mahesh- SP2 Product EngineerJames M. Caruthers- SP2 President and Chief Technology OfficerMahdi Abu-Omar- SP2 Chief Science OfficerM. Subramanian- SP2 consulting director

Raj Ramamurthy- VP of Innovation and Technology for WilsonartJose Kofman- Director Pembroke MDF Inc.

Wade Lange- Entrepreneur in Residence at Purdue FoundryGreg Deason- Senior VP and Director of Innovation at the Purdue FoundryJeff Siirola- Prof. Chemical Engineering Purdue University

Advisory Council

CURRENT BINDER SYSTEM

Medium Density Fiber Board

Plywood

Binder System = the glue that holds the composite board together

Glue Used Today:Urea-FormaldehydePhenol-FormaldehydeMelamine-Formaldehyde

Formaldehyde is a

CarcinogenSubchapter VI, 15 U.S.C. §2697Formaldehyde Standards for Composite Wood Products Act

REGULATION

California Air Resource Board(CARB) Wants to

remove all Formaldehyde from products.

This is a Regulatory Disruption to the Market

“The International Agency for Research on Cancer (IARC) reclassified formaldehyde from ‘probably carcinogenic to humans’ to ‘carcinogenic to humans’ in 2004, based on the increased risk of nasopharyngeal cancer.” – California Air Research Board

Pulping Liquors — Pulping liquors (i.e., black liquor) that are reclaimed in a pulping liquor recovery furnace and then reused in the pulping process, unless it is accumulated speculatively as defined in 40 CFR 261.1(c). See 40 CFR 261.4(a)(6).

CURRENT TECHNOLOGY

FormaldehydeOther Chemicals

Rolling Press

Binder

Composite Board

Carcinogenic Formaldehyde Vapor

Wood Chip refined

w

DISRUPTIVE SP2 TECHNOLOGY

Rolling Press

Other Chemicals

Reactor SPERLU TM process by SPEROPurdue Patent US2016/0289150A1

Wood Chips

Lignin Monomer

Low Cost Raw Material

Composite Board

No Carcinogenic Vapors

NEW BINDER SYSTEM SP2 TECHNOLOGY

Patent DisclosureD2017-0058

Wood Chips/clean lignin free wood chips

Wood chips lignin free

IMPLEMENTATIONCURRENT TECHNOLOGY

DISRUPTIVE SP2 TECHNOLOGYPLUG

& PLAY

Board Manufacturing Process

MARKETMaterial Billion Pounds/YearA. Medium Density Fiberboard 4.80B. Particle Board 3.63C. High Density Fiberboard 1.50D. Plywood 2.68E. Oriented Strand Board 14.04F. Engineered Hardwood Part of MDFG. Laminated Veneer Lumber 1.57

Wood-Based Panel Production, Europe, 2013

Product Particle Board MDF HDFInsulating Board Plywood OSB Veneer Sheets

AVOID LIQUOR – BLACK - A DIRECT PROCESS TO CLEANER CHIPS AND OPEN PRODUCTION CAPACITY AND ALTERNATIVE TO ENVIRONMENTAL REGULATIONS OF BURNING LIGNIN CURRENT WOOD CHIPS TO BLEACHING PULP

The solid state cleaner pine chips can be bleached With house color safe bleach at RT!

The poplar an extended reactor extract Makes clean chips that may not need bleaching

You be the judge will we save cost?

MARKET CONTINUED

• Installed Cost is $45 B /year• 10% upcharge for formaldehyde free $4.5 B/year

• 10% upcharge as indicated by Lowe’s and Wilsonart• SP2 Revenue

• ~50% of the Upcharge + Profit from Material – Operating Cost Profit• North America and Europe = $2.4 B potential profit

(Detailed Financial Analysis in Written Business Plan) – lets discuss

SUPPLY CHAIN

Raw Material Value Added Compound

Board Manufacturer

sRetails

List of Current Board Manufacturing CompaniesArauco North America

Boise Cascade Co.

Clarion Boards Inc./ KronospanGeorgia-Pacific Wood ProductsKronospan LLC

Louisiana-Pacific Corp.

Pembroke MDF

Plum Creek MDF, Inc./ Weyerhaueser

Roseburg and Sierra PinesWest Fraser Mills

Swiss Krono

List of Current RetailersLowe’s

Home Depot

Menards

Lumber LiquidatorsACE

Etc.

List of Current RetailersFurniture

Cabinets

Wilsonart

SP2 Technology

Raw MaterialsWood Chips

Chemicals

Etc.

Paper Industry-pulpBleached?

CUSTOMERS – BOARD MANUFACTURING FINISHING

Examples• Wilsonart- Final Finishing Step• Pembroke- Manufactures of Fiberboards• Retailers- Lowe’s, Home Depot, etc.• Paper industry?

“Alternative resins and cost effective biobased binders would revolutionize the composite board industry.” –Raj Ramamurthy, VP of Innovation and Technology for Wilsonart“As you are aware, eliminating added formaldehyde from composite panels is today a very attractive proposition.” –Jose Kofman Director Pembroke MDF Inc.

List of Current Board Manufacturing CompaniesArauco North AmericaBoise Cascade Co.Clarion Boards Inc./ KronospanGeorgia-Pacific Wood ProductsKronospan LLCLouisiana-Pacific Corp.Pembroke MDFPlum Creek MDF, Inc./ WeyerhaueserRoseburg and Sierra PinesWest Fraser MillsSwiss Krono

SP2 will Partner with our Customers!

WIN-WIN-WIN-WIN-WIN

•WIN for the Board Manufactures•WIN for the Retailers•WIN for the Consumer (No Carcinogen)•WIN for SP2

•WIN will be 25% cheaper pulp cost

COMPETITION• Currently, there is no workable formaldehyde free solution

• Competition is minimal• PMDI (di-isocyanate system)

• Chemical companies and board companies are distinct• SP2 can enter a nature break in the material to board making

industry / Making cleaner pulp without liquor as is functional glue

“The only available way to currently do this is by utilizing [P]MDI as a binder. This binder presents mills with many challenges, not the least one being cost” –Jose Kofman, Director Pembroke MDF Inc.

GROWTH OF SP2

EntryIP ProtectionPartnershipsAdd to TeamProduct Refinement and Certification• 2017-2018• $100,000

ExpansionNorth American Composite MarketGovernment Grants and Contracts• 2019• $750,000

RegulationWork with CARBContact Retailers10,000 lbs of chemical binder from a chemical producerTradeshowsFirst Revenue Generated• 2020• $1,200,000

AbroadExpansion into European Market• 2021• $3,865,000

“It is important to Wilsonart’s future to help guide sustainable materials business…”–Raj Ramamurthy, Global VP Innovation and Technology Wilsonart

Note: this model is conducted using the business model of selling Lignin Binder as a Product. Discussions are still in progress about a possible Licensing Strategy. Cleaner pulp will be sold to paper industry

FINANCIAL FORECAST

Selling at $.31 per pound with 20% upcharge.Assumption of 25% increase of purchase of binder each year.Manufacturing is by contracted organizations being paid 65% of profits generated.

MASS BALANCE SPERU PROCESS

A NEW OPPORTUNITYEMERGING FROM THE LAB

Petrochemical Derived similar finger print/bio chemicals to hybrid Chemicals

Blending Tank ProcessRolling Press

Composite Board

Formaldehyde-Free

Faster Strategy to

Enter Market

$100 K Blending

Tank Process is Cheaper!!!

$100 K

Wood Chips

DISRUPTIVE SP2 TECHNOLOGY

Rolling Press

Other Chemicals

Reactor SPERLU TM process by SPERO

Wood Chips

Lignin Monomer

Low Cost Raw Material

Composite Board

No Carcinogenic Vapors

NEW BINDER SYSTEM SP2 TECHNOLOGY

Patent DisclosureD2017-0058

$20-30 M Investmen

t into SPERLUTM Reactor Process!

$20-30 M

Wood Chips

Would you Invest $200 to $300 K to make $2.4 B/Year? Need investors Let’s discuss

WE ARE IN OVER OUR HEADS!• Dedicated, Knowledgeable Team

• Akshay Mahesh – Material Development• Professor Jim Caruthers – Expert in Polymer Properties• Professor Mahdi Abu-Omar - Expert in Green Chemistry• M. Subramanian – Development/ Sales in Board Industry

• + Engaged the Foundry, Wade Lange, Tim Peoples• +Purdue OTC• +Joe Pekney, Center for Deliberate Innovation

+• Individual with Senior Management Experience with a Chemical Background

Eventually hired as President of SP2

SUSTAINABLE PLASTIC PRODUCTS (SP2)ENVIRONMENTALLY ACCEPTABLE AND SUSTAINABLE COMPOSITE MATERIAL

$45 B/ YEAR MARKET $2.4 B/ YEAR REVENUE

THANK YOU FOR YOUR TIME

Environmentally Acceptable and Sustainable Composite Material

Mahesh Subramanian Dec-lam@att.net

Akshay Mahesh: amahesh@purdue.edu