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WASTE-TO-ENERGY WITH A NEXT GENERATION SMALL SCALE

PLASMA GASIFIER

PRESENTED BY DR. ABRAHAM E. HASPEL TO NY ENERGY & ENVIRONMENTAL FUNDERS

MARCH 8, 2013

Company Confidential

[email protected] | 202.640.2558

2Company Confidential – 3-8-2013

Presentation Outline

Value PropositionCogent’s Waste-to-Energy SystemMarketing & Business ModelTeam & PartnersDevelopment & Deployment PlanCogent’s Next Steps

Company Confidential – 3-8-2013 3

Value Proposition


Why Invest in Cogent?

Small Footprint & Low Capital

Cost

Efficient Conversion

Feedstock Flexibility

The Future:

• Compact• Affordable• Efficient• Flexible

Digesters,

Pyrolysis

Incineration, Large-scale

Plasma

Small-scale Plasma


Cogent’s Advantage

Cogent can go where its competitors can’t

To more attractive markets, such as islands, which have: High electricity prices (e.g., $0.42/kWh in USVI) High municipal solid waste (MSW) disposal costs (e.g., $70/ton in the Bahamas) Insufficient MSW for traditional waste-to-energy (WTE) systems (e.g., 50-75 tons

per day in Antigua & Barbuda, Dominica, Grenada; a few hundred tons per day in Bahamas, Guam, St. Lucia, USVI)

These markets are inaccessible to competitors because their systems are too big, too inefficient, or too specialized in their feedstock requirements

As a result, Cogent will deliver:

A solution for waste elimination and cost-effective electricity generation at an appropriate scale with almost no environmental impact

High rates of return to its investors


Cogent’s Waste-to-Energy System


The Cogent WTE Process Schematic

PREPROCESSING (COTS)• Incoming solid waste handling &

storage• Waste separator, dryer, shredder• Conveyor to plasma processor

PLASMA WASTE PROCESSING• Oxygen production system (COTS)• Plasma gasification unit – produces

syngas• Syngas scrubber

POWER GENERATION (COTS)• Primary electricity generator powered by

syngas from plasma processing unit• Secondary generator powered by waste

heat

COTS = Commercial Off The Shelf


What is Plasma?

Plasma is the “4th state of matter” Ionized gas with temperatures of 10,000+ degrees K Lightning is an example of naturally-occurring plasma


Conventional Plasma WTE Processing

Indirect processing method Use plasma to heat the environment inside a processing chamber Essentially “cooks” the waste, producing partially-processed

syngas (requiring additional processing) and consuming significant electricity

AlterNRG (Westinghouse)

Pyrogenesis


Next Generation Cogent WTE System

Waste Feed Direct processing method

Cogent’s breakthrough: plasma modules stacked vertically with cross-module connections create a long, continuous plasma column with a uniform high-temperature processing zone

Plasma field fills the processing chamber, rather than just heating the environment

Waste is introduced directly into the plasma field and is vaporized into a clean syngas in a single step as it passes through the processor

Uses less electricity for processing, leaving more net electricity for sale

All other major components are proven, COTS systems


Next Generation Plasma Processor

Peter Kong, Ph.D., Idaho National Laboratory (INL) INL Inventor of the Year 50+ Scientific Papers; 30+ Patents 20+ Years of Plasma Experience Developed numerous prior generations of plasma

processing technology including large-scale waste processing systems

Dr. Kong’s most recent invention is the core of Cogent’s system “Modular Hybrid Plasma Processor” (MHPP) Operational since 2005 - now operating Generation 5 Over $5M DOE funding invested to date Developed for low cost bulk production of nanomaterials

Video of Dr. Kong & operational MHPP available at http://youtu.be/Ouev47gBsrA


System Energy Balance

13Company Confidential

WTE Competitive Landscape

High Power Output

Low Power Output

Large Footprint

& High Cost

Small Footprint

& Low Cost

Incineration

Pyrolysis

Digesters


Marketing & Business Model


Target Markets

High value opportunities are particularly present on islands High cost of electricity High cost of waste disposal / landfill fees

Location Price of Electricity ($/kWh)

Waste Disposal Fee ($/ton)

Bahamas $0.33 $70Bermuda $0.39 -Cayman $0.37 $89Curacao $0.42 -Jamaica $0.35 $52Hawaii $0.39 $85USVI $0.42 -

Caribbean electricity data primarily from CARILEC 2010 tariff survey. Caribbean waste disposal data from PAHO 2005 solid waste management report. Hawaii information from websites of local service providers.


Target Markets

“Closed loop” scenarios Customer produces waste & consumes energy Distributed generation – same model as rooftop solar

panels

Hotels & Resorts Ports / Harbors Government & Military Installations

College Campuses Agricultural & Livestock Operations Factories

Industrial & Residential Complexes Shipboard Recreation Facilities


Initial Market Interest

Letter of Intent (LOI) from Caribbean Community Climate Change Centre committing to assist Cogent in: Placing an initial commercial system Minimum 10 additional systems

Vacation Resorts Ports & Harbors Agricultural Operations

US Insular Affairs: Guam, USVIGov’t: Curaçao, Trinidad & Tobago, BelizeCommercial / Industrial / Agricultural: Jamaica, Hawaii,

Honduras, Bahamas, BarbadosLimited landfill space makes waste disposal an urgent

problem for island nations, states, and territories.


Business Model

Two Components Cogent Energy Systems will build & sell fully packaged

WTE systems - $7.5M projected capital cost + 20% annual royalty 1st full-scale system: projected $7-8M cost to build Nth full-scale system: projected $4-5M cost to build

Individual operating companies will own & operate each WTE system with multiple revenue streams Long-term Purchase Power Agreement (PPA) with user Long-term waste disposal (tipping fee) agreement with user Potentially available additional revenue streams

Carbon credits (~0.5 ton CO2e per ton of MSW) Sale of metals, chemicals, and vitrified slag components -

depends on waste stream composition Tax credits, rebates, and local incentives


Why Customers Will Buy From Cogent

Operating a Cogent WTE system will be profitable from day one, with pre-tax IRR of 20% or more, and 20-year total net cash flow of nearly $30M

Critical Input Assumptions Operating companies pay Cogent $7.5M purchase price and 20% royalty Systems cost $550,000/year to operate, with uptime 340 days/year Operating companies sell electricity at an average $0.30/kWh, while the

projected 20-year unlevered levelized cost of electricity from a Cogent system is approximately $0.16/kWh

Operating companies receive waste disposal “tipping” fee of an average $30/ton

Capital cost is financed over 10 years at 4% interest (IADB, Ex/Im)

In $ Thousands Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

Net Cash Flow $391 $464 $538 $614 $691 $770


Why Investors Will Profit From Financing Cogent

Cogent will sell 35+ systems over six years, earning nearly $300M top-line revenue

Cogent anticipates exit via acquisition in year five or six, to potential buyers including energy companies and utilities, equipment manufacturers, military contractors, landfill and waste management companies, or other WTE companiesIn $ Thousands Year 1 Year 2 Year 3 Year 4 Year 5 Year 6

New Systems Sold

1 2 3 4 9 18

Net Cash Flow ($4,300) ($2,100) $1,600 $10,400 $22,700 $64,400


The Cogent Team


Cogent Energy Systems Management Team

President: Abraham E. Haspel, Ph.D. President of Cogent Analysis Group. Former Deputy Assistant Secretary of

Department of Energy, COO of Office of Energy Efficiency & Renewable Energy. Former Assistant Deputy Secretary of the Interior

VP, International Market Development: Douglas Russell Former executive at Natsource (a carbon asset management firm). Former

Director, Air Issues Branch, and Director General, Air Pollution Prevention Directorate, Environment Canada

VP, Operations: Paul Vickers Process Engineer with extensive refinery, chemical plant and power plant

design, start up and operating experience at Shell Canada and TransAlta. Director of Sustainable Development at TransAlta

VP, Marketing & Strategic Planning: Joel Haspel VP, Renewable Energy at Cogent Analysis Group. Former VP of Marketing &

Strategy with venture-backed software startup Plethora Technology CFO: Bert T. Edwards, CPA, CGFM

Former Assistant Secretary and CFO, U.S. State Department. Led entire public sector practice as Partner at Arthur Andersen


Cogent Energy Systems Partners

Idaho National Laboratory – R&D One of the nation’s leading research facilities in clean energy, nanotechnology,

and nuclear R&D Cogent agreements with INL:

Work For Others (WFO) Exclusive Worldwide License Option Agreement (LOA) Cooperative Research & Development Agreement (CRADA) Awaiting Execution Upon

Financing

Creare, Inc. – Engineering & Design Jay Rozzi, Ph.D. – Team Lead Spinoffs Hypertherm (Plasma Torches), Edare (Manufacturing) Past projects include a portable plasma decontamination unit for the U.S. Air

Force, as well as systems for the Mars Rover, Hubble Space Telescope, and C-17 aircraft

Gershman, Brickner & Bratton, Inc. (GBB) – Waste Handling Specializes in landfill and recycling facility design and management, solid waste

management planning, and solid waste handling infrastructure Manages Guam’s solid waste infrastructure


Phased Development & Deployment Plan


Three Phase Process

• Single full-scale plasma module for demonstration and testing (1 of 3 for entire MHPP system)

• LOI from customer for initial unit purchase

Phase 1:

$750K

• Full-scale 3-module MHPP system completed

• Detailed design for fully integrated WTE system

• Signed contract with first customer

Phase 2: $3.2M

• Final balance of plant and total system cost depend on customer details – type and volume of feedstock,

• Deliver fully integrated WTE system

Phase 3: $2.25M-$5.25M

4-6 Months

4-6 Months

4-6 Months


Cogent’s Next Steps

• Raise Investment Capital• Scale & Test Core Plasma Processor (CRADA with INL)• Secure First Client & Determine Operating Parameters• Procure COTS Components Optimized for First Client• Integrate & Test End-to-End WTE System (Partnership

with Creare)• Deploy Initial System to First Client• Initiate Repeatable Sales & Delivery Processes


Thank You

For More Information, Please Contact

Dr. Abraham E. Haspel, President

[email protected]

202-640-2558

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