olie business plan draft feb 13 2013 final draft

EnCanSol/Olie, Inc.

Business Plan Draft

Introduction

1

Confidential

For Internal Use Only

February 2013

2013

2013Olie, Inc, … a Better, Greener Battery

EnCanSol/Olie, Inc. (Olie) is a company focused on emerging, clean energy storage technologies. Olie owns world-wide rights to the patented Rechargeable Alkaline Manganese (RAMCELL) battery technology – considered one of the most cost effective and environmentally responsible battery technologies in the world.

Since 1994, small format RAMCELL batteries in AAA, AA, C and D sizes have been manufactured and sold to Original Equipment Manufacturers (OEMs) and to leading retailers world-wide, including Wal-Mart, Frys, Woolworths, Best Buy, Canadian Tire, QVC, Auschan, and Metro AG. While Olie is expanding the small format business into new OEM and retail markets, the company is also bringing to market a large format, flat plate RAMCELL battery. With several performance, cost and environmental advantages, this battery will compete in the multi-billion dollar lead acid battery market.

The RAMCELL technology was originally developed by the same electro-chemist who invented the disposable alkaline battery. To date over $40 million has been spent on the development of RAMCELL, resulting in 28 international patents. The active materials at the core of RAMCELL are zinc and manganese, which are low cost and readily available. In small format cylindrical form, the construction format limits the effective size of the battery. However, by converting the battery design to a large format flat-plate configuration, the proven electro-chemistry can be scaled up for more powerful industrial applications.

The worldwide battery market is approximately US$89 billion annually, and is growing at an annual rate of 5%. The rechargeable battery segment is currently $63 billion annually, and is growing at over $3 billion per year. Due to its low cost, lead-acid batteries currently dominate the rechargeable market, with annual sales of approximately $45 billion.

Olie’s large format RAMCELLS will primarily compete with lead acid batteries. Its low self-discharge rate (less than 4%/year), coupled with its low cost, small size, light weight, higher performance, and environmental friendliness, make it ideal for backup/standby power applications. These include cell towers, cable communication systems, traffic lights, airports, healthcare facilities, critical municipal and other governmental service facilities, and building safety lighting, to name a few. These same characteristics will make it an ideal replacement for the SLI (Starting, Lighting, and Ignition) vehicle battery.

Olie’s small format RAMCELLS can be used in any application that traditionally uses disposable batteries, including flashlights, clocks, radios, remote controls, toys, video games, and audio devices. RAMCELLS s are also used in battery pack form in a growing number of OEM products including LED lighting products, solar lighting, energy monitors, mice and keyboards, and solar clocks. Small format RAMCELLS

s are also now being used in several large hand-held flashlights replacing lead acid batteries.

Olie’s small format RAMCELL manufacturing plant is located in Amherst, Nova Scotia. The plant is ISO 9001 certified, and has annual capacity of over 75 million batteries. The plant consists of automated equipment for chemical processing, parts making, AA and AAA size battery manufacturing assembly lines, and final packaging, as well as quality control and test equipment. Large format RAMCELL pilot production is being set up at this facility.

2


For commercial production of large format RAMCELLS, Olie is reviewing several options including the establishment of its own manufacturing plant, as well as joint venture production opportunities in key international markets.

The two major environmental issues facing the battery industry today include the need to eliminate the use of toxic, heavy metals used in several batteries and the need to reduce vast accumulation of waste generated by the disposal of single-use batteries. The use of RAMCELL batteries addresses both of these issues. Hazardous heavy metals of greatest concern include lead and cadmium. Europe has recently banned the use of Nickel Cadmium (NiCd) batteries due to cadmium poisoning. In 2011, one thousand five hundred (1,500) lead acid battery plants in China were closed due to lead poisoning.

Olie’s management team and directors have created over $1 billion of share value in companies they have started. They have extensive professional, technical, and executive experience, and long track records of success in the startup and operation of private and public companies, in the energy and battery development industries including extensive experience with the RAMCELL technology.

Projected battery sales of small and large format RAMCELLS are expected to establish Olie as a multi-million dollar company within 5 years and a multi-billion company within a decade. Olie is now seeking an investment of up to $12.6 million from private and industrial partners. Use of Proceeds will include the research, engineering, design, construction and start-up of line and equipment for flat plate batteries, cylindrical and flat plate inventory build-up, Canadian government debenture repurchase, intellectual property costs, and working capital.

1. THE COMPANY

1.1 Mission:

Olie’s mission is to become a leading international provider of environmentally responsible rechargeable battery products to the consumer retail, OEM and industrial markets. Olie’s primary focus is the ongoing commercialization, development and improvement of its proprietary Rechargeable Alkaline technology.

1.2 Objectives & Strategies:

Olie has the following 3-5 year objectives:

To become profitable in less than two years through the sale of small format RAMCELL products to the international retail and OEM markets.

OEM focus will continue to be on replacing lead acid batteries with small format RAMCELL battery packs.

The small format RAMCELL focus will be to significantly increase retail and OEM distribution in the United States and open several new markets, including India and China.

To increase small format RAMCELL sales to over $18 million in the next 3 years, and $41 million in the next 5 years, through expansion in the global retail and OEM battery market.

Complete large format, flat plate battery R&D, engineer and construct the manufacturing equipment and line, and begin sales in 2015.

3


Capitalize on the opportunity created by the emerging “Green” Industry’s trends and consumer demand for safe, cost effective environmentally friendly battery products and solutions.

Continue to build the Company through strategic partnerships, key distribution agreements and business combinations which will provide leverageable infrastructure.

Target partnerships and distributor relationships with companies with proven track records in their respective businesses.

Expand the Company's product lines through product development programs for battery and charger products.

2. THE MARKETS:

2.1 INDUSTRY OVERVIEW

Rechargeable Battery Market

Rechargeable batteries include RAMCELL, NiCad, NiMH, Lead Acid and Lithium technologies. World-wide shipments of rechargeable batteries were projected to increase 5.1 percent annually to $63.5 billion in 2012. The lead acid battery technology dominates the market with annual sales of over $43 billion.

Single-Use Battery Market

Single-use batteries include zinc carbon, alkaline and lithium batteries. Worldwide shipments of single-use batteries were expected to increase at a 4.2 percent annual rate to $26.2 billion in 2012.

72%4%

24%

Global Shipments US$89 Billion

Rechargeable Batteries

Alternative Energy Stor-ageSingle-Use Batteries

2.2 MARKET TRENDS

The following are significant trends in consumer, OEM and industrial battery markets:

4


Consumer Battery Market

NiCd batteries were recently banned in Europe due to cadmium poisoning issues. Toys R US and Hasbro Toys recently announced that they will be phasing out NiCd batteries in

the near future. The Ontario Minister of the Environment approved the Municipal Hazardous or Special Waste

Program. Single-use alkaline batteries are included in this program and must be returned for proper disposal.

The OEM & Industrial Markets

As with the consumer market, NiCd batteries were recently banned for OEM use in Europe due to cadmium poisoning issues.

In 2011, over one thousand five hundred (1,500) lead acid battery plants were closed in China due to health issues associated with the use of lead.

The safety issues associated with rechargeable lithium batteries have been well documented in recent years, including a number of fires and explosions resulting from lithium battery use in cell phone and lap top computers.

The rising prices of lead, nickel and cobalt have resulted in significantly higher prices of lead acid, and nickel based batteries in recent years, as compared to zinc and manganese used in RAMCELLS.

Batteries & The Environment

The major issues facing the battery industry today include safety issues relating to lithium batteries, the need to eliminate the use of toxic, heavy metals used in several batteries, and the need to reduce vast accumulation of waste generated by the disposal of single-use batteries.

Billions of single-use and rechargeable batteries are used every year worldwide. Eventually these batteries, some with toxic materials in them, end up in landfill sites where toxic chemicals can leach into ground water tables. The production of these batteries also generates significant green house gas emissions. By using non-toxic RAMCELLS in place of single-use alkaline batteries battery waste and green house gases can be reduced by over 90%.

The Environmental Choice Program is North America's leading benchmark of environmentally responsible products and services. The program provides consumers with a level of assurance that the products bearing the EcoLogo™, meet stringent environmental criteria. The mark also tells the consumer that the manufacturer of the product has been audited by a credible third party. The small format RAMcell technology is the only battery to receive the prestigious EcoLogo™ certification.

2.3 COMPETITION

There are five main types of rechargeable batteries in the market today:

5


Lead-Acid – (the dominant rechargeable battery used in vehicles, back-up power, others)Benefits: low cost, and most suitable for low to medium drain applications. Disadvantages: heavy, large, low energy density, capacity fades with deep discharge cycling, must be recycled due to use of poisonous lead.

NiCd – (the first convenient, high energy rechargeable for consumer products)Benefits: Better energy density than lead acid.Disadvantages: Significant Memory Effect (loss of capacity unless fully discharged prior to charging), high self-discharge, made with poisonous cadmium and toxic nickel, banned in Europe, higher price than lead acid.

NiMH – (replacing NiCd in consumer products, used in some hybrid vehicles)Benefits: Lighter and higher energy density than lead acid and NiCd, limited memory effect, Disadvantages: High self-discharge, higher price than NiCd, uses toxic nickel.

Lithium – (used in high drain devices that require extended use and are less price sensitive, like cell phones, computers)Benefits: Higher energy density than NiMH, high cycle life, high depth of discharge, low self discharge.Disadvantages: Most expensive battery due to lithium content and difficulties to manufacture, dangerous (can ignite and in some cases explode), limited supply of lithium.

RAMCELL – (only rechargeable battery designed to replace disposable batteries)Benefits: Low cost, and most suitable for low to medium drain applications. Very low self-discharge, high energy density, environmentally friendly, no Memory Effect, maintenance free.Disadvantages: In its current format, it is not suitable for some high drain applications such as digital cameras, there is capacity fade with deep discharge cycling.

3. CURRENT PRODUCTS – SMALL FORMAT RAM CELL S

Small format RAMCELLS in AAA, AA, C and D sizes, and in various battery packs are the ideal choice as an economic alternative to single use batteries, and a cost effective, environmentally responsible alternative to lead acid, NiCad, NiMH, and lithium batteries. Product features include:

Low cost and readily available raw materials (zinc and manganese); The only rechargeable battery designed to be used in any application that uses single-use alkaline

and zinc carbon batteries; Unlike other rechargeable batteries, RAMcells come fully charged so they can be used right out

of package; RAMCELLS don’t suffer from rapid self discharge like other rechargeable batteries. They have a 10

year shelf life and will continue to have this shelf life after repeated uses; Rechargeable 100-1000’s of times or more depending on use and depth of discharge the

frequency of recharging – charging before the battery is fully discharged provides extended service life;

Do not suffer from “memory effect” – can be recharged any time. No toxic materials used.

6


To support its small format RAMCELL retail business Olie offers a full line of chargers, including 2, 4, and 8 position wall plug chargers for AAA, AA, C, and D sizes. 2 position USB chargers are also available for AAA and AA batteries.

4. MARKETING & SALES

4.1 Retail Sales

Based on previous ownership historically, sales of small format RAMCELLS focused on the Canadian market, with several retailers carrying product including Canada’s largest retailers: Wal-Mart, Canadian Tire, and Loblaws. In addition to expanding traditional retail sales into several new markets, Olie is utilizing several other distribution channels in order to market RAMCELLS. They include:

Catalogue sales Internet sales Home Shopping Networks Industrial sales Military sales

4.2 OEM Sales & Development

There are several key features that make small format RAMCELLS the ideal choice for several OEM products. These features include:

Excellent intermittent discharge/charge characteristics – 5000+ cycles possible. The higher nominal voltage of 1.5V of rechargeable alkaline batteries provide performance

advantages including greater brightness in solar lighting applications or flashlights compared to 1.2V NiCd and NiMH batteries.

Industry leading charge retention and charge acceptance – 10 yr. shelf life. Manufactured in the fully charged state – ready to go without initial recharge.

Simple charging circuitry – charging circuit can be easily and economically made. Olie’s rechargeable alkaline is considered the most environmentally responsible battery system in the world – it is the only battery system in North America to be awarded the “Eco Logo” in the Rechargeable Consumer Batteries Category.

RAMCELL is very cost effective – it can and is replacing lead acid batteries.

Current Products:

At the present time Olie is supplying small format RAMCELLS for several products including:

Solar Garden Lights LED spotlights/flashlights Wireless Keyboard Wireless Mice Solar Clock/Smoke Detectors Energy monitors

7


5. PRODUCT DEVELOPMENT & MANUFACTURING

5.1 Small Format RAMCELL

Product Development

Ongoing product improvement is a priority for Olie. Since its market introduction in 1994, there have been significant improvements to small format RAMCELLS including longer cycle life, and increased cumulative service life and charge retention. These efforts will continue to be a priority.

PE+: At the present time, PE+ is in development and is expected to be available within 24 months through a combination of new additives and new production equipment.

Cylindrical RAMCELL Manufacturing

Olie’s battery plant in Amherst, Nova Scotia has the capacity of producing the following batteries, based on a three-shift, five day per week operation:

55 million AA batteries annually 26 million AAA batteries annually

The ISO 9001 certified plant is 38,000 sq. ft., and it sits on 10.5 acres of industrial land. The plant consists of automated equipment for chemical processing, parts making, AA and AAA size battery manufacturing assembly lines, final packaging, as well as quality control and test equipment.

When capacity is reached in Amherst and additional supply is required, Olie has several alternatives available to it. The Nova Scotia government has stated that it would finance the purchase of new production lines. The Company owns 5 acres of land adjacent to the plant for future expansion. Opportunities for Chinese or Indian production are under discussion.

New production equipment will be supplied by Hibar Systems Limited of Richmond Hill, Ontario. Since 1974, Hibar has been a leader in the development and production of metering pumps, dispensing systems, process and manufacturing equipment for the international battery market. Hibar’s experience with various battery technologies is considerable, and includes single-use and rechargeable alkaline, lithium, zinc chloride, lead acid and nickel metal hydride. Current clients include the major battery companies.

8


5.2 Flat Plate RAMCELL

The active materials and general performance characteristics between cylindrical and flat plate RAMCELLS are virtually identical. However, in cylindrical form, the construction format limits the effective size of the battery. By converting the battery design to a flat-plate configuration, the proven electro-chemistry can be scaled up for more powerful industrial applications. Large format RAMCELLS have a number of cost, environmental, and performance advantages over its competition.

1/3 size and 1/3 weight of a lead-acid battery with comparable performance.

Superior 10 year shelf life.

High energy density.

Low cost.

Maintenance free.

No toxic materials used.

9


10


Product Development

Olie has successfully completed the key research and development phases of the large format RAMCELL program. Olie is now in the engineering development phase, anticipates having a lab prototype in 2013, and reaching the Beta prototype stage within 20 months.

Project Phases Status/Timing

1. Development of a prototype single cell Complete 2. Development of 10 Amp battery 6 months3. Build Alpha 1 “stand alone” prototype 10 months4. Build Alpha 2 “optimized” prototype 18 months5. Build Beta “commercial” prototypes 24 months

Flat Plate RAMCELL Manufacturing

For the commercial production of flat plate batteries, Olie is reviewing several options including the establishment of its own manufacturing plant, and joint venture production opportunities in key international markets.

6. INTELLECUAL PROPERTY

6.1 Patents

The Company currently owns patents covering all if its intellectual property, and is continually updating its technology and filing new patent applications. Current patents expire between 2014 and 2031; however, the Company has developed technological enhancements to each of the patents, ensuring continued patent coverage.

Below is a summary of Olie’s RAMCELL patents:

11


# Number TITLE

1 6,361,899 ADDITIVES FOR RECHARGEABLE ALKALINE MANGANESE DIOXIDE CELLS

2 6,035,518METHOD FOR PREPARING A CYLINDRICAL SEPARATOR, A TOOL USABLE FOR THE METHOD AND CYLINDRICAL CELL WITH THE SEPARATOR

3 5,626,988SEALED RECHARGEABLE CELLS CONTAINING MERCURY-FREE ZINC AN0DES, AND A METHOD OF MANUFACTURE

4 7,169,508METHOD OF MANUFACTURING ANODE COMPOSITIONS FOR USE IN RECHARGEABLE ELECTOCHEMICAL CELLS

5 7,008,723METHOD OF MANUFACTURE OF AN ANODE COMPOSITION FOR USE IN A RECHARGEABLE ELECTOCHEMICAL CELL

6 7,718,305 RECHARGEABLE ALKALINE CELL WITH CATHODE CONSISTENCY COMPENSATION

7 7,754,386 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE

8 8,153,299 RECHARGEABLE ALKALINE CELL WITH CATHODE CONSISTENCY COMPENSATION (DIVISIONAL-1)

9 8,153,300 RECHARGEABLE ALKALINE CELL WITH CATHODE CONSISTENCY COMPENSATION (DIVISIONAL-2)

10 2,157,174MANGANESE DIOXIDE POSITIVE ELECTRODE FOR RECHARGEABLE CELLS, AND CELLS CONTAINING THE SAME

# Number TITLE

11 2,189,341SEALED RECHARGEABLE CELLS CONTAINING MERCURY-FREE ZINC ANODES, AND A METHOD OF MANUFACTURE

12 ZL 94 1 01682.XMANGANESE DIOXIDE POSITIVE ELECTRODE FOR RECHARGEABLE CELLS, AND CELLS CONTAINING THE SAME

13 ZL 94 1 12978.0SEALED RECHARGEABLE CELLS CONTAINING MERCURY-FREE ZINC ANODES, AND A METHOD OF MANUFACTURE

14 194,220MANGANESE DIOXIDE POSITIVE ELECTRODE FOR RECHARGEABLE CELLS, AND CELLS CONTAINING THE SAME

15 129,441 ADDITIVES FOR RECHARGEABLE ALKALINE MANGANESE DIOXIDE CELLS

16 262,079MANGANESE DIOXIDE POSITIVE ELECTRODE FOR RECHARGEABLE CELLS, AND CELLS CONTAINING THE SAME

17 EP1958278 B1 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE


19 200680044539.0 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE

20 2008/5588 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE

21 144,109 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE

22 MX/a/2008/006830 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE

23 2006-317436 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE

24 2008-7015877 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE

25 1038/MUMNP/2008 RECHARGEABLE ALKALINE CELL HAVING REDUCED CAPACITY FADE AND IMPROVED CYCLE LIFE


27 13/699,604 ALKALINE BATTERY AND CLOSURE ASSEMBLY

28 TBA ALKALINE BATTERY AND CLOSURE ASSEMBLY

6.2 Know-How

12


Equipment Manufacturing: Partnership with Hibar Systems Ltd. provides access to patents & know-how for battery manufacturing equipment, including access to Hibar’s separator technology.

Charging Technology: OLIE has know-how and experience in regards to RAMCELL technology, as well as multi-chemistry charging.

Battery Manufacturing Processes: OLIE has a wide range of know-how and experience in regards to battery manufacturing processes for RAMCELLS.

7. STRATEGIC ALLIANCES & PARTNERSHIPS

Small format RAMCELL Sales – For the sale of small format RAMCELLS, Olie is currently working with a growing network of distributors in key markets, including North America, Europe and South America, China, Australia, India and Asia.

Product Development – In addition to its own R&D efforts now under the leadership of Dr. Josef Daniel-Ivad, Olie has completed a major research project with the National Research Council of Canada, (subsidized by the Federal Government) (www.nrc-cnrc.gc.ca), which independently verified Olie’s technology and intellectual property. Olie is currently working the University of British Columbia on collaborative large format research and development program.

Product Manufacturing - All RAMCELL production equipment in Nova Scotia has been supplied by Hibar Systems Ltd. (www.hibar.com). Hibar is a high technology design and manufacturing company, with expertise in a wide range of technologies and products including metering & dispensing systems, high performance packaging systems, automated assembly systems, and chemical processing systems. Olie will continue to work with Hibar for pilot and commercial production.

Large Format Flat Plate RAMCELL Sales – Amongst others, Olie is working with Alpha Technologies (www.alpha.com), an established worldwide leader in the back-up power industry. Alpha is providing engineering and design support to optimize Olie’s flat-plate battery for commercialization and introduction to their global market. Alpha currently acquires more than 30,000 lead acid batteries each month for new installation.

8. MANAGEMENT

WAYNE HARTFORD, Chief Executive Officer & Chief Financial Officer, Director

Mr. Hartford has over 25 years of experience in the battery business and 35 years' experience in marketing packaged consumer goods. Mr. Hartford started in product management at Warner Lambert in 1967, moved to Kimberly Clark in 1970 as Marketing Manager, and in 1973 became a Director of Marketing Services for Young and Rubicam. In 1974, he founded D.W. Hartford & Associates Inc., a marketing consulting firm that became a full service advertising agency in 1976. In 1986, and in conjunction with Dr. Karl Kordesch, Mr. Hartford formed Battery Technologies Inc. (“BTI”), and was responsible for the development and subsequent international launch of the rechargeable alkaline battery (RAMCELL).

13


http://www.alpha.com/

http://www.hibar.com/

http://www.nrc-cnrc.gc.ca/

ROBERT C. GARDNER, President & Secretary, Director

Mr. Gardner's has an extensive business and legal background with several publicly traded companies. Mr. Gardner is the principal of the law firm, Gardner & Associates, of Vancouver, British Columbia. He is called to the Bar Society in England and Wales, and admitted to the Law Society of British Columbia, Canada. Mr. Gardner was appointed a Queen's Counsel in 1988. Since January 1998, Mr. Gardner has served as a member of the board of directors for at least 15 different companies whose securities were traded in various public markets.

14


STEPHEN MELDRUM, Chief Operating Officer

Stephen Meldrum has 20 years of sales, marketing and licensing experience in the battery and energy storage industries in Europe, Canada and the US. He has been involved with the RAMCELL technology for over 15 years, holding various senior management positions with a focus on sales and operations. He was President of Ashurst Technology Corp., a company that successfully transitioned advanced materials and energy storage devices from lab to the market place. From 1989 to 1995, Mr. Meldrum was Vice President Sales and Business Development for BTI, including three years in charge of BTI’s international licensing operations.

DR. JOSEF DANIEL-IVAD, Chief Technical Officer

Dr. Daniel-Ivad is Chief Technical Officer, and responsible for all technical aspects of the rechargeable alkaline technology including chemistry, manufacturing processes, charger technology, new application development and intellectual property protection. Previously, Dr. Daniel-Ivad had a12-year career with BTI, where he established the R&D laboratory for Rechargeable Alkaline batteries. Later, as BTI’s VP, Technology Development, he was responsible for all aspects of product and manufacturing process engineering and development. Dr. Daniel-Ivad has a Ph.D. from the Technical University of Graz, Austria, where he completed his thesis under the auspices of world renowned electrochemist Dr. Karl Kordesch, one of the founders of BTI and the inventor of the original single-use alkaline battery at Eveready.

DOUG McKILLOP, Plant Manager

For the past 19 years, Mr. Mckillop has worked as Supervisor and the Plant Manager for the small format RAMCELL production facility. During this time, he has been responsible for all plant operations including production, packaging, purchasing, warehousing and shipping. He has also been involved in set up of turnkey battery production lines in South Korea, Malaysia and China. Previously, Mr. Mckillop worked for 15 years as a Supervisor for a confectionary products company, and was involved with several companies including Standard Brands, Nabisco and Hershey.

DIRECTORS

Below is a list of the Board members, as it is presently constituted. The Company intends to revamp the Board, to add directors with relevant business experience and qualifications to chair the Board's Audit and Compensation Committees. The Company has entered into an agreement with former PepsiCo senior executive Len Schutzman to become non-Executive Chairman of the Board of Directors, effective when the funding described in this Business Plan is completed.

Len's service as a Director of five publically-held companies brings the expertise in governance, business development/strategy, international business and regulations for publically traded companies to our team. His reputation and high level relationships with key retailers and distributors will be a significant factor in securing U.S. and international distribution for the Company’s products.

15


GREGG VERNON, PEng

Gregg Vernon has over 30 years’ experience in the energy industry, in which he has held technical and senior executive positions with major energy companies around the world. He has also successfully grown companies, including Prospero Hydrocarbons Inc, Petro Andina Resources Inc (TSX-V:PAR), Alange Energy Corp (TSX-V:ALE), and Petrodorado Energy Ltd (TSX-V:PDG), from start up to profitable enterprises sold for hundreds of millions of dollars.

FRANK BOROWICZ, QC, CA (Hon)

Frank Borowicz has over 35 years’ experience in corporate governance and regulatory compliance. He is a retired partner of the international law firm Davis LLP, and is a Governor of the Vancouver Board of Trade. He served as Chairman of the BC Industry Training Authority, and is an independent director of several private and public companies, including West Cirque Resources (TSX-V: WCQ) and Hemisphere Energy (TSX-V: HME). Educated at Harvard, Dalhousie, and Loyola, he is a member of the Institute of Corporate Directors, and an honorary member of the Institute of Chartered Accountants.

GRANT VERNON

Grant Vernon has 30 years’ experience in hi-tech industry marketing and channel development. After majoring in Urban and Regional Planning at Mount Royal College in Calgary, he developed specialized technical expertise in building and implementing engineered plant design and manufacturing solutions throughout Canada and the US. He currently manages regional sales in the computer aided design industry for Autodesk Corporation (NASDAQ:ADSK).

9. FINANCIAL INFORMATION:

The schedule below recaps the Operating EBITDA for the Company’s current small format, cylindrical battery product line for its last fiscal year June 30, 2012, and a projection for the five fiscal years ended September 30, 2013 thru 2017. These projections include only current operations related to the OEM and retail sale of small format cylindrical batteries to the Company’s existing customer base.

See Section 10 – OPPORTUNITIES, for information related to additional channels being pursued for sales of small format cells, as well as the huge potential for marketing flat plate large and small format batteries currently under development. Obviously any revenue and profit generated by these opportunities will have a positive, perhaps significant, effect on the revenue, cash flow, and shareholder value of the enterprise.

16


Actual

Revenue 1,810,600$ 3,894,800$ 7,527,700$ 12,201,200$ 22,339,700$ 41,172,700$ Cost Of Goods Sold 1,698,600 3,142,100 3,815,000 5,157,100 8,824,200 15,309,800 Gross Profit 112,000 752,700 3,712,700 7,044,100 13,515,500 25,862,900

R&D 258,600 536,600 1,037,100 1,681,000 3,077,800 5,672,400 SG&A 192,500 142,000 274,400 444,800 814,500 1,501,100 total Operating Expenses 451,100 678,600 1,311,500 2,125,800 3,892,300 7,173,500

EBITDA (339,100)$ 74,100$ 2,401,200$ 4,918,300$ 9,623,200$ 18,689,400$

Projection - Fiscal Year Ended September 30,

2013 2014 2015 2016 2017Year Ended

June 30, 2012

In order to understand the actual results for the 2012 fiscal year, it is important to note that before EnCanSol Capital Corporation (ECC) took over the small format business, prior ownership (Pure Energy Solution) did nothing to grow sales during the time they owned the business - a period of close to 3 years. This period of inactivity was based on the fact that they had plans to sell the small format business to a strategic acquirer, who was a partner in another of the Company’s technologies. Prior to Pure Energy Solution’s involvement, the small format business had sales of approximately $5 million per annum in the Canadian market. At the time, the total number of stores selling product was approximately 1,200, with an average of $4,000 sold per store per year.

Since ECC took control of the small format RAMCELL business in April 2012, it has taken several steps to expand its business into several key international markets. This expansion includes both retail sales and sales to original equipment manufacturers (OEMs). Based on recent new business, requests for quotes, and the interest level of a wide number retail and OEM companies, ECC believes it can generate exponential growth for several years.

The projections are based on the following assumptions:

By 2017, we are utilizing a significant portion of the Amherst, Nova Scotia battery plant capacity, assuming 3 shifts working 5 days per week. That translates to an annual production of 55 million AA and 26 million AAA batteries. Obviously, those numbers jump dramatically if we move to a 7 day per week production schedule.

The revenue numbers assume that 75% of future production is allocated to the retail sale of AA and AAA 4-packs and charger kits, and 25% to OEM sales.

The retail sales figures are based on the use of distributors for all sales. There are certainly opportunities of going direct and/or using commissioned sales agents, whereby we would generate increased margins.

“Pre - Pure Energy” historical retail direct sales figures have shown that retailers can sell between $3,000 and $10,000 worth of RAMCELL products annually per retail store. For the purpose of the projection, our revenue numbers assume each retailer sells an average of $2,000 per store, and we sell that volume of product at the wholesale selling price paid by the distributor.

17


The figures assume that a reasonable number of retailers will conduct one or more promotions per years, which is typical in the battery industry.

10. OPPORTUNITIES

10.1 Small Format Cylindrical Cells

The Company has engaged a consultant to, among other things, design and execute a plan to significantly increase distribution and sales. Below is chart recapping the number of U.S. points of distribution for major national retail and natural food chains, all of which would be intrinsic outlets for the Company’s small format RAMCELL batteries.

Major National Chain Retail Outlets Club Stores (3 Chains) 1,200 Drug Stores (3 Chains) 19,900 Grocery Stores (5 Chains) 5,800 Big Box Retailers (3 Chains) 6,900 Hardware and Home Improvement Stores (4 Chains) 10,900 Convenience Stores (2 Chains) 10,100 Auto Parts Retailers (3 Chains) 11,400 Total Major National Chain Retail Outlets 66,200

UNFI 23,000

Total 89,200

This chart does not include regional and independent retailers, nor various “non-traditional” channels which would, taken together, generate a total of well over 100,000 potential U.S points of distribution.

10.2 Large Format RAMCELLS

The Company will first concentrate on developing and marketing its large format flat plate product line, and will secondarily proceed with the development of small format flat plate products.

Large format cells have gone through very little technical change in more than 100 years, and Lead Acid became the standard for virtually all large applications simply by taking over the growing Starting Lights and Ignition (SLI) market and creating economies of scale with volume production. There have been thousands of manufacturers who have configured devices using these batteries, because they are readily available. In the past few years, there is a back order situation with lead acid and the hazards of lead poisoning are starting to be realized.

Various market segment opportunities include:

18


Back Up and Standby Power – There are already thousands of standby applications, such as emergency lighting, that are using lead acid batteries. An economic alternative has not existed until now, and that is a very easy retro fit. Computers are probably the best known application that require ongoing power to operate and maintain their software, but there are many applications that to-date have simply not had a suitable solution. When hurricane Katrina hit the Southern US coast, not only did the power go out but, as a secondary problem, the cell phone system started to fail in a half hour, and was completely out in 2 hours. That left all of the emergency workers and rescue groups without any real immediate communications, and greatly increased the difficulties of dealing with the situation.

An offshoot of this problem is that, in any emergency situation, when the power goes down the traffic lights go out and an immediate grid lock occurs. A stand-by traffic light system has been high on the wish list of every Government in the world, and the size of that market has not even been estimated.

Other critical standby power applications include: U.S. Healthcare Facilities – 5,700+ American Hospital Association registered hospitals, with

over 950,000 beds; 5,300+ Ambulatory Surgery Centers, performing over 23,000,000 procedures annually; 16,100 Nursing Homes with 1,700,000+ beds, 86% occupied.

U.S. Gas Stations – Over 115,000, as of the end of 2008. U.S. Cell Towers – Over 240,000 in 2010, each requiring battery replacement approximately

every 3 years. Server Farms. Governmental/Municipal Facilities (e.g. police and fire stations) International facilities, as above.

The Starting Lights and Ignition Battery (SLI) - This segment is virtually the exclusive domain of the lead acid battery, and has grown in parallel with the growth of the vehicle market. It has spawned the use of back up batteries for things like emergency lighting, and computer back up, but the SLI is the core business and represents a multi-billion dollar market. The large sized lead acid 12 volt batteries dominate this market, but the smaller 12 volt systems for such things as motor cycles, ATV’s and personal water craft represent an estimated $1,000,000,000 plus in annual sales with growth near 10%.

Electric Vehicles – The need for peak power with increased capacity is the limiting factor on electric vehicles, in that they have the storage system but do not have a sufficient conversion system, and they can’t carry enough stored power to economically provide the power and range the market wants. For an electric automobile to succeed in the overall market, it will need to have a much better, safer, environmental and economic system, combining both storage (batteries) and conversion (charging during operation) devices. This combination of systems is now called “Hybrid” vehicles.

There is an opportunity to work with the newest generation of electric car designers to optimize the hybrid systems, and to combine a tailor made battery system with a fuel cell or small turbine charger. This system will constantly charge the batteries at the average rate needed, and this will eliminate the range problem for electric vehicles, which is the key restriction on the market today.

This market will be several billion dollars in the next 10 years and will grow exponentially after that. Manufacturers will certainly have the capacity to build a million electric cars by 2015. Forecasts indicate that 5 to 8 percent of all vehicles being battery-powered by 2020, and 20% to 30% by 2030.

19


The Military – The US military alone uses nearly $1,000,000,000 worth of small batteries per year in over 200 individual applications. Without replacement batteries or charging capabilities, these forces are basically back to smoke signals after a very few days on their own. The computers and communication device, along with electronic drones, robots and smart weapons are rapidly developing, and the military is constantly on the lookout for better solutions to these portable power needs. The US Navy is currently testing our small RAMCELL, and has requested to will test large format RAMCELLS when they are available.

As can be seen the market for large format RAMCELLS is enormous and primarily targets the $43 billion lead acid battery market. The annual growth alone of over 5% represents more than $2 billion. Gaining a 1% share of the lead acid business based on today’s numbers would represent sales of $430 million.

11. INVESTMENT and USE OF PROCEEDS

The company is seeking an investment of $12.6 million, on terms to be negotiated. Following is a schedule recapping the Use of Proceeds:

Lab Manufacturing and Testing Equipment 1,000,000$

Flat Plate Research and Development 800,000

Engineering of Manufacturing Equipment 1,500,000

First Generation Flat Plate Manufacuring Line Construction 4,000,000

Manufacturing Line Start-up/Flat Plate Inventory Build-up 2,200,000

Cylindrical Materials and Finished Goods Inventory 500,000

Discounted NSBI $7 million Debenture Purchase 1,000,000

Patents and IP Cost 100,000

Working Capital and Contingency 1,500,000

Total Investment 12,600,000$

12. VALUATION

On an asset basis, the value of the Company could exceed $100 million. An independent intellectual property investment specialist has informally indicated to management that the patents alone may be valued at an amount approaching $100 million. Additionally, the replacement value of the manufacturing and R&D facilities (land, building, and equipment) is estimated to exceed $10 million. This asset valuation does not take into consideration the cash flow of the small format, cylindrical battery operation, as forecast in the enclosed projections, nor any additional cash flow from the planned expanded U.S. retail distribution, and the future anticipated sale of flat plate products, both of which could be significant.

20
