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Investment Opportunity
OverviewEmissions Reduction and Fuel Efficiency
Enhancement for Every Combustion Engine In the World
March 2016
This Presentation/Document is based upon information supplied by the management of Square1 Energy, LLC (“Square1 Energy” or the "Company") and is being furnished on a strictly confidential basis, solely for use by prospective investors.
Each recipient of this presentation/document agrees that all of the information contained herein is confidential and is not to be used for any purposes whatsoever except to assist the recipient in evaluating the Company. Each recipient agrees to keep the information contained herein in strict confidence and, neither directly nor indirectly, to reproduce or transmit in any form or by any means any of the information contained herein or to disclose such information to any person, firm, or corporation without the prior written consent of the Company.
This presentation/document contains forward-looking statements reflecting Square1 Energy, LLC’s current forecast of certain aspects of the Company's future. It is based on current information that has been assessed, but which by its nature is dynamic and subject to rapid and even abrupt changes. Forward-looking statements may include, without limitation, statements regarding growth projections, including financial forecasts and the projected rollout of the Company's products.
The Company's forward-looking statements should be considered in the context of these and other risk factors. All future written and oral forward-looking statements made by the Company on its behalf are also subject to these factors. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Securities laws vary from state to state and investors should seek independent legal advice regarding compliance with applicable securities laws in connection with any investment in the Company.
The securities of the Company are not registered under United States securities laws.This presentation/document is not a prospectus or a public offering in any jurisdiction.
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Forward Looking Statement
A Leading Edge Technology Company Positioned for Dynamic Growth and a Solid ROI
The Benefits of our 2.0 Technology
Reduced Emissions Reduced Fuel Consumption Reduced Maintenance Reduced Downtime Increased Engine Oil Life Increased Torque/Horsepower
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- Quality Built- Quality Built
3/1/2016
Market in need of a solution for mounting emissions regulatory pressure and for high and rising fuel and maintenance costs
Proven, audited product performance by Hydro-Maxx line that provides an immediate solution for both emissions and fuel costs
Immediate sales opportunities across trucking, marine, rail, heavy equipment and stationary generator sectors in North America and Europe with 1-2000+ unit potential per customer
Sound company structure – re-organized for speed to market; low CAPEX required to launch
Experienced management team in place to execute finance and commercial launch plan
Experienced R&D and manufacturing team in place
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The Square1 Energy The Square1 Energy OpportunityOpportunity
3/1/2016
Proven, market-ready products with market presence and a history – Hydro-Maxx 2.0 and SIC Pre-2014 >70 units built and tested for performance data, proof
of durability, fine-tuning and commercial use Numerous hard data runs with definitive proof of performance
Increasing market opportunity from regulatory pressures and rising fuel costs
Current competitor technology limits (our SIC is transformative technology)
Lowest cost AND the most effective solution to a HUGE problem
Proprietary IP: Trade secrets and issued patent Platform technology
Multiple Markets Multiple Applications Multiple Penetration Strategies Available
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A Timely SolutionA Timely Solution
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US Market PotentialSelected Segments
Market Segment
US Installed
Base
Product Price (avg.)
Market
share
Complete System
RevenueSIC
RevenueSIC + Tubes
RevenueOver the Road Transportation
Passenger car135,399,945 $3,500 2%
$9,477,996,150
$2,707,998,900
$3,791,198,460
Non-passenger car 2-axle 4-tire vehicles
99,124,775 $4,000 2%
$7,929,982,000
$1,982,495,500
$2,775,493,700
Medium/Heavy Trucks and Buses 9,640,966 $10,000 5%
$4,820,483,000 $482,048,300 $867,686,940
Non-Road Diesel Equipment
Off Road Diesel Vehicles/ Equipment 850,000 $10,000 5% $425,000,000 $42,500,000 $68,000,000
Marine 450,000 $20,000 5% $450,000,000 $45,000,000 $99,000,000Locomotives 22,000 $30,000 5% $33,000,000 $2,200,000 $4,840,000Stationary Diesel
Generators 658,649 $20,000 5% $658,649,000 $65,864,900 $144,902,780Other
Industrial/Commercial boilers 582,805 $6,000 5% $174,841,500 $29,140,250 $40,796,350
Irrigation 546,308 $6,000 5% $163,892,400 $27,315,400 $38,241,560
Total111,875,503
$24,133,844,050
$5,384,563,250
$7,830,159,790
3/1/2016
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Multiple ApplicationsMultiple Applications
3/1/2016
In electrolysis an electric current is used to separate water into its components – hydrogen and oxygen. The electricity enters the water at the cathode, a negatively charged electrode, passes through the water and exits via the anode, the positively charged electrode. The hydrogen is collected at the cathode and oxygen is collected at the anode.
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The Science-The Science-Basic ElectrolysisBasic Electrolysis
3/1/2016
HHO Cell/Generator
Recovery-Reservoir
Bubbler- Separator
+12v
+12v
0v
0v
Battery OutputHydrogen-Oxygen Generator Functional Diagram
HHO Cell/ Generator ; Cracks water (H2O) into H-H-O gasRecovery- Reservoir ; Recovers Electrolyte from cell and stores additional fluidBubbler- Separator; Separates HHO Gas from Electrolyte
Flow
Flow
Electrolyte/ HHO Gas
Electrolyte
HHO Gas
HHO to Engine
“BRUTE FORCE” Electrolysis System
Bubbler/ Separator
10 3/1/2016
HHO Generator
Recovery-Reservoir
The Square1 Energy Hydrogen-Oxygen (HHO Gas)
Generator Functional Diagram
HHO to Engine
Servo Integrated
Controller
Power Distribution
Board
Power MultiplierModule
Voltage/CurrentFeedbackDevice
Temperature FeedbackDevice
Communication Network
System Interface Board
Separator/Stripper
Gas Processing Tanks
Gas MicronizerGas Serrator
Pressure Infuser
Fluid Refill System
Fluid Circulator
Continuous Feedback Loop
Level Sensing Circuit
CONFIDENTIAL & PROPRIETARY
EMFAttenuator
Fluidic State
Conditioner-Dryer
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Hydro-Maxx Advantage
>Absolute Control>Maximum Efficiency>Higher Quality Gas
3/1/2016
Patented Servo Integrated Controller (SIC) driven system
Voltage/current and temperature feedback sensors Continuous operation Expanded fluid replacement schedule Virtually maintenance-free Precise H/O gas delivery Proprietary plating in reactor cell Most gas produced per amps used Most efficient electrolyte ratio Extreme durability
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The The AdvantageAdvantage
3/1/2016
For Diesel Engines, Hydrogen Injection is the only known technology to significantly reduce emissions without a fuel penalty. (Unlike other emissions gear.)
A majority of emissions are merely unburned fuel. Diesel Hydrogen Injection offers a more complete burn of
fuel. Since more of the fuel is combusted, there are fewer
emissions.
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Benefits of H/O InjectionBenefits of H/O Injection
Emission Percent Reduction
NOx Up to 60%Carbon Monoxide (CO)
Up to 100%
Hydrocarbons (HC) Up to 100%Particulates (PM) Up to 95%Opacity (Smoke) Up to 70%
Approximate amount of emission reduction you can expect by utilizing
our systems.
3/1/2016
Reduced Exhaust Emissions(combined HC, CO, NOx, WCBSFC,Particulate Matter)
20% to 90% reduction in emissions
Increase in Engine Power andTorque
Between 8% and 12%
Reduced Fuel Consumption Between 10% and 40% (depending on engine’sage / mileage, and load)
Reduced Lubricating OilDegradation
Minimum 30%
Decreased Maintenance Costs Minimum 30%Increased Maintenance Intervals Minimum 30%
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Benefits of H/O InjectionBenefits of H/O Injection
3/1/2016
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- - Expertly Expertly EngineeredEngineered
3/1/2016
Electrical Fail Safes Micro-Computer Controller – Servo
Integrated Controller (SIC) Over-Pressure Switch Collision Detection Switch –
Optional Oil Pressure Switch Interlock –
Works Only When Engine Is Running Safety Chain – Circuit Design Shuts
Down System If Any Input Is Taken Away
Temperature Control Current Control Low Voltage Sensing Fused Output On All Devices Operates Only When Vehicle is
Running High & Low Level Fluid Level
Switches
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Designed Designed Safe Safe Built Built
SafeSafe
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Mechanical Safeties Operates at low pressure:
Nominal < 5PSI UL Listed, Pressure Relief
Valve “Hydrogen” Rated Fittings Safety Check-Valves Redundant Anti-
Detonation Tanks Power Fail-Safe Valves –
Instant Venting Of Gases High Pressure Hose, Rated
2500 PSI All Stainless Steel
Enclosure
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Conclusively Tested
Carty & Carty Trucking
Fed Ex Critical
City Hauler
Over The Road driving
Stop & Go City Driving
Heating/Cooling Unit
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Test ResultsTest/Vehicle Purpose/Notes Duration/
Miles Data CollectionResults
Fuel Savings Emissions Reduction
Volvo Truck 16 liter
Certified Low-idle engine
Test long haul durability, fuel savings and emissions reduction over multiple
seasons-183,000 miles
9 months Client Data 10%100%*
*residual trace emissions too small to measure
FedEx Refrigerated Container-
Reefer Engine only
Test emissions reductions- successfully met CARB standard and enabled vehicle
to enter CA6 Months Client Data 33% 98.8%
City Trash Collection Truck
Tested emissions impact only under stop-start conditions- showed immediate
emissions reduction, increased power- completed daily route and hour faster
45 days S1E Tested NA 48.4%
2001 Ford F350 Super Duty Crew Cab pickup
truck with 7.3-liter diesel engine.
Tested fuel savings and emissions reduction in controlled circumstance
60 test runs at multiple speeds
Dynamometer3rd party data
17%Average of all
tests21%
Average of all tests
Dump Coal Hauler Truck
Rosebud Mining Operation-new trucks
(not low idle)
Tested product reliability and fuel savings- cold weather (down to 15F) -
extreme rough terrain- suspension broke but HM persisted- emissions not
observed
5 months 3rd party data 18% NA
Motor Coach and Race Car Trailer –
Caterpillar C-15 engine
Tested for emissions reductions and fuel savings- pulled consistent 80,000lbs on
long haul over the road
Used over 3 years
Tests conducted at 12,000 miles
3rd party data 28.4% 31%
Ground Power UnitAirport Operations
Tested for emissions reductions and fuel savings- lab environment- fuel
consumption tracked by measuring tank weight-
8 week test period
S1E/Client confirmed 18.4% 60%
Transport Lux – Belgium
10-liter Over The Road Urban (Day Trips)
Tests conducted by KHLim university- Tested for fuel savings- test period was after 6 months of operation of Hydro-
Maxx
18 months122,000
kilometers
Transics (3rd party) GPS Data collection
16.6% NA
Waukesha F1905Raw Natural Gas
Engine
The objective of the field test was to evaluate the potential for the system to achieve Title V emissions standards for
this class of engines.
# Months total use-
2 Day testing period
EPA certified 3rd party data NA
Carbon Monoxide (CO) emissions were reduced by 77% VOC and formaldehyde emissions were reduced by 6% and 17% respectively. Engine vibration essentially disappeared within 5 minutes
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S1E, LLC Funding HistoryS1E, LLC Funding History
3/1/2016
Financing History July 2014 - Q3 2015
$1,500,000 Private Equity Raised- Class A Units (Preferred)
Q1 2016- $50,000 private loan Sold soft asset for $75,000 Continue Series A Offering
Multi-unit test arranged with global heavy equipment/materials company. Target 10,000 engines/pieces of equipment
Multi-unit test arranged with KY mining company operating 100’s of above- and below-ground generators and machines.
Bid acceptance expected in Q2 in N. African city for 300+ units on public transport at excellent margins
Strategic Finders and Introduction Agreement with U.S. based cleantech consulting firm, including internationally-acclaimed Ukrainian emissions expert, to introduce S1E technology to key European officials. First test, focused on emissions reduction, expected on
numerous public transport vehicles in large Ukrainian city. Strategic venture with global shipping industry consultants to
secure R&D commitment and funding for scaling up to Large Marine application testing.
Developing coalition of strategic partners for funded Rail Industry application emission testing and scale-up engineering.
In negotiations with Chinese emissions products distributor, for testing and distribution.
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Current DevelopmentsCurrent Developments
3/1/2016
Title of Security Square1 Energy, LLC Class A Membership Units. Class A
membership units are provided 80% preferred distribution and liquidation rights.
Investment Offering 58,824 Class A Units at $8.50 per unit for a total of
$500,000. Minimum Subscription
3000 Units/$25,500. Use of Proceeds
Marketing, manufacturing, initial inventory and working capital and further development of both immediate term and longer term market applications and product opportunities incorporating the Hydro-Maxx™ technology.
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The Investment Offering
Execution Team Ed Stahl, Chief Executive Officer (interim), and Board of Managers, has 35 years of sales,
marketing, management, and operations experience and is a 14 year veteran of the renewable energy industry. As an independent consultant, he provides start-up, strategy and development consulting services in the renewable energy industry. Mr. Stahl has successfully guided the strategic development and start-up of three grassroots ethanol plants in Kansas with development costs in excess of $325 million.
Timm Finfrock, Chief Technology Officer and Chief Operating Officer (interim), and Board of Managers, is one of the world’s foremost experts in the field of hydrogen and its related use in internal combustion engines. He has over 26 years of experience in the field of robotics, material handling, and special purpose application for internationally recognized companies. He has expertise in automation application, coupled with his knowledge of hydrogen as a fuel supplement and provided science leadership and engineering support to S1E. Mr. Finfrock is the inventor listed on the patent for the Servo Integrated Controller technology and its application in Hydro-Maxx™.
Jerry Loeh Vice-President, Sales and Marketing, and Board of Managers, holds a Degree in
Chemical Engineering from Washington University in St. Louis. He has 38+ years’ experience in business development, chemical plant process engineering, manufacturing, R&D, technology licensing and product/toll/commercial management. Mr. Loeh was global business development and global product manager for Monsanto and Solutia and is experienced in helping commercialize new technologies in the chemical and alternative energy industries.
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Management TeamManagement Team
3/1/2016
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