Company Overview

Smartcube Packaging Systems

Contents • Manufacturing Sites.

• How The Smartcube Bag Works.

• Features & Benefits

– Increased sales.

– Reduced waste and damage.

– Reduced transportation and storage.

• Smartcube vs. Rigid Pail or Jugs.

• Smartcube vs. Stand-up Pouches

• Special Smartcube Bag Features.

– High-end graphics

– Reclosures

• Flip-top lid

• Tin-tie

• Zippers

- Handles - Air removal devices - Pour or scoop - Inner ring scallops

• Available Film Structures. • Product Quality. • Production Quality. • Filling Machinery. • Next Steps Forward for Neo Energy.

Manufacturing Sites

• Bentonville, Arkansas, USA

• Guangzhou, China

How the Smartcube Works For illustration purposes

there is white product in the

center chamber of the

Smartcube verses the black

product in the 4 corner

chambers. The view shown

is a top view of an actual

bag. The Smartcube bag

utilizes approx. 93% of the

cubic area available.

Top View Force Diagram 80% of the product is placed

within the inner ring (center

chamber of the bag) depicted by

the red circle. The form of the

product pushes outwards as

indicated by the red arrows. The

internal forces pushing outward

are then redirected laterally as

indicated by the black arrows.

Without the internal support to

the bag it would balloon.

Smartcube Bag

Smartcube® Stands-up Under Load

“Other” Square Bag The competitors bag has 64lbs

stacked on top of it & shows

substantial bulging on all sides.

While not scientific proof, this

is an indication of how the

bottom bag filled with this

material could respond when

stacked with 1/3rd as much

product by weight. Significant

distortion of the bags shape has

occurred which could give rise

to pallet overhang & load

instability. Structure appears to

be a 6-mil Polyester.

The metal plates

weigh 191 lbs (12

x’s the 15lb bag

wt.) While not

scientific proof,

this is an indication

of how the bottom

could respond

when stacked 12

high, eg 2 pallets

with 6 layers per

pallet. Structure is

a 3-mil poly/poly.

The bags used in this illustration were purchased at retail solely for the purpose of conducting this comparison. The purpose of this comparison is to illustrate certain characteristics of the packaging. Nothing is to be inferred regarding the quality of

the contents of the package. Chef’s Blend is the registered trademark of SOCIETE DES PRODUITS NESTLE S.A. CORPORATION, PENNINGTON & TRI-PLEX are the registered trademarks of PENNINGTON SEEDS, INC. SMARTCUBE is the

registered trademark of SMARTCUBE Packaging Systems.

Features and Benefits

• Increased Sales

• Standup presentation gives “instant billboard”.

• Ready-made display directly from pallet without the

need for a display banner.

• High-end graphics.

• Window options for product visibility.

• Customer friendly: Handles, reclosures, less bulk.

• Improve your sustainability score.

CAT LITTER “Use of the Smartcube packaging concept has increased our sales by

over 200% over the past 2-years and has enabled us to go ‘nation-

wide’ with a major pet store retailer.”

Aaron Westcott

Plant Manager

Precious Cat

• Reduced Waste and Damage

• Sized exactly to pallet dimensions

eliminating overhang.

• Bag construction and design enables

80% of product to be housed in 2 layers

of film.

• Stands-up under load.

• Co-ex structures are able to be

engineered specifically for purpose

using an extremely wide range of

materials.

-A major US Pet-food manufacturer saw their large dog-food bag damage rate in the Canadian

market go down from 8% – 9% to approach almost zero.

-A major US grass seed company reports “ the only broken bags we’ve seen are the ones where the

transportation pallet has been hit so hard that the 1” thick wood has broken as well”.

• Reduced Transportation and Storage • 150 – 200,000 empty units per truck load. 25 x’s

greater than empty rigid pails 25 x’s fewer trucks and 25 x’s less warehousing.

• Cube shape maximizes weight per volume and double and even in some cases triple stacking of pallets is possible during warehousing.

Smartcube bag & pallet data

Filled Bag

Dimensions

(Inches) L x W

Bag Filled

Height

(5 - 20")

Pallet Size

L x W

Bags

per

Layer

#

Layers

Bags

Per

Pallet

Total Pallet

Height incl.

Pallet

6" x 6" 6” 40" x 48" 48 9 432 59

8" x 8" 8” 40" x 48" 30 7 210 61

9.5" x 9.5" 12” 40" x 48" 20 5 100 65

13" x 12" 15” 40" x 48" 12 4 48 65

13" x 16" 20” 40" x 48" 9 3 27 65

Smartcube vs Rigid Pails - Jugs

• Increase stacking efficiency by eliminating the air spaces

between containers. 20 5-gallon size Smartcube’s can fit

per layer.

• Reduce packaging & costs by 40% - 70%.

• Improve handling of unfilled

packaging – 1 truck of empty Smartcube’s can

replace 60 trucks of pails.

– Warehouse space can be reduced by

up to 60 times.

– Trucking, unloading & handling can

be reduced by up to 60 x’s.

Smartcube vs Stand-up Pouches

• Decrease your freight costs by eliminating the weight of the

corrugated box and getting more product per pallet without

fear of crushing.

• Eliminate the corrugated box.

Smartcubes stack well without a box.

• Eliminate crushing. – Smartcubes are structurally sound &

can be stacked 5 – 6 layers high &

warehoused 2 – 3 pallets high.

• Standup without the need for rigid

film. Non-deforming cube is derived

from design and not films rigidity.

Special Smartcube Features

With or without windows

• High-end Graphics

• Reclosures

Flip top lid

Tin-tie

Zippers

360° Press-to-close Slider

• Handles

Already present in

gable top of bag Die-cut above seal.

Single flap attached

to top of bag

One-way valve(patented)

Air perforation holes (multiple patterns available)

Air removal devices

Stacking is not a problem!

Pour or scoop

Inner ring scallop holes (aid in filling and emptying bag corner

pockets).

Additional inner-ring corner pocket holes to either; Aid product to flow into the center of bag when scooped…. or

Allows wide range of fill heights for the same bag

Film Structures

• Laminated films

• Surface Printed Scratch Resistant Films

• Gauge range from 2-mil (50um) to 6-mil (150um).

• Barrier Films including Co-ex Structures of

– Nylon

– Polypropylene

– High Density

– EVOH

– Specialty films e.g. Valeron

• Metalized films.

Product Quality

• Every order generates its own Specification

Sheet that outlines the exact “agreed upon” bag

specifications and tolerances.

• 100% product quality guarantee is agreed to

relative to this Specification Sheet.

• The Specification Sheet is supplied as part of

the order confirmation process.

Smartcube Cat Litter Bag Tolerances

Creation Date: 08/22/08

Date Issued: 08/22/08

Revision Date:

Material: 2mil Poly/ Ink /Adh/2.0 mil Coex

Film Supplier: XYZ

Tolerances :

Target Min Max

Ring Height: 7.25” 7.06” 7.44”

V-Seal to Ring: 0 -0.19” +0.19”

Front(L): 8.00” 7.81” 8.19”

Gusset 1(W): 8.00” 7.81” 8.19”

Back(L): 8.00” 7.81” 8.19”

Gusset 2(W): 8.00” 7.81” 8.19”

Overlap 1” 0.75” 1.25”

Bag Length(H): 18.75” 18.56” 18.94”

Secondary Hole Punch: 1.00” 0.50” 1.25” Yes or no

Outer Film Gauge: 4 mil 3.6 mil 4.4 mil

Print (Lateral shift) 0 -0.25” +0.25”

Edge Seals 0.25” 0.30” 0.13” Yes or no

Valve or Pinholes (position specified) Yes or no

Handle (position specified) Yes or no

Text: Print Defects:

Any Bag that has missing text on any panel will be pulled out and rejected. (The above includes partial text.)

Background Color:

A copy of the agreed upon final press approval prints and swatches will be kept on site (swatches for light and dark shade of each

color will be included).Any deviation outside of this tolerance will be rejected

Other print defects:

Any noticeable print defect will pulled from the production run and rejected.

Splices:

Splices will be pulled from the production run and rejected.

Production Quality

• Detailed specifications, COA’s and spot quality checks on incoming raw materials and printed film.

• Each pallet of bags is encoded with a date/time of manufacture.

• Bag tested from each machine every 15 minutes for • Dimensional analysis and print check.

• Seal test: Creep and Total Destruction

• Machine packers also perform a visual print and seal check on bundles of approximately 50 units.

Filling Equipment • Semi-automated

» Minimal alteration required for complete operation on most

semi-automated lines.

» Most common areas of modification include the addition of

- Band Sealer (approx. $15,000)

- Distribution head

» Typical filling speed is 5-14 bags per minute using 2 -3

people.

Weigh Hopper Band Sealer Pallet Stack Side & Top View of

Distribution Head

• Fully Automated » JEM International are experienced Smartcube filling machine fabricators.

» Filling speeds in excess of 40 bags per minute are able to be guaranteed.

» Machine costs typically ~$400,000 including robotic stacking

» Personnel requirements are typically 1 – 2 people.

» Machine can include fully automated palletization. Robotic stacking.

» Peel seal and die cut handle ready.

» Shrink wrap bundling .

» Fill weights can range from

1 – 80 lbs.

Lincube Volume Specification Chart

Spe c ific Gra vity 0 .4 0 0 .5 0 0 .6 0 0 .7 0 0 .8 0 0 .9 0 1.0 0 1.10 1.2 0 1.3 0 1.4 0

Pounds pe r Cubic Foot 2 5 .0 3 1.2 3 7 .4 4 3 .7 4 9 .9 5 6 .2 6 2 .4 6 8 .6 7 4 .9 8 1.1 8 7 .4

Base Size Fill Height

Inches ~ Ga l's

Cubic

Inc he s

6.00 0 . 9 205 3 .0 3 .7 4 .4 5 .2 5 .9 6 .7 7 .4 8 .2 8 .9 9 .6 10.4

9.00 1. 3 308 4 .4 5 .6 6 .7 7 .8 8 .9 10.0 11.1 12.2 13.3 14.4 15.6

10.00 1. 5 342 4 .9 6 .2 7 .4 8 .6 9 .9 11.1 12.4 13.6 14.8 16.1 17.3

6.50 1. 7 395 5 .7 7 .1 8 .6 10.0 11.4 12.8 14.3 15.7 17.1 18.6 20.0

10.00 2 . 6 608 8 .8 11.0 13.2 15.4 17.6 19.8 22.0 24.2 26.3 28.5 30.7

10.25 2 . 7 623 9 .0 11.3 13.5 15.8 18.0 20.3 22.5 24.8 27.0 29.3 31.5

14.00 3 . 7 851 12.3 15.4 18.4 21.5 24.6 27.7 30.7 33.8 36.9 40.0 43.0

5.25 1. 5 357 5 .2 6 .4 7 .7 9 .0 10.3 11.6 12.9 14.2 15.5 16.8 18.0

8.00 2 . 4 544 7 .9 9 .8 11.8 13.7 15.7 17.7 19.6 21.6 23.6 25.5 27.5

12.25 3 . 6 833 12.0 15.0 18.0 21.0 24.1 27.1 30.1 33.1 36.1 39.1 42.1

7.25 2 . 6 609 8 .8 11.0 13.2 15.4 17.6 19.8 22.0 24.2 26.4 28.6 30.8

8.00 2 . 9 671 9 .7 12.1 14.5 17.0 19.4 21.8 24.2 26.7 29.1 31.5 33.9

10.00 3 . 6 839 12.1 15.2 18.2 21.2 24.2 27.3 30.3 33.3 36.4 39.4 42.4

11.00 4 . 0 923 13.3 16.7 20.0 23.3 26.7 30.0 33.3 36.7 40.0 43.3 46.7

8.50 3 . 2 729 10.5 13.2 15.8 18.4 21.1 23.7 26.3 28.9 31.6 34.2 36.8

9.50 3 . 5 815 11.8 14.7 17.6 20.6 23.5 26.5 29.4 32.4 35.3 38.2 41.2

12.50 4 . 6 1,072 15.5 19.4 23.2 27.1 31.0 34.8 38.7 42.6 46.4 50.3 54.2

13.25 4 . 9 1,136 16.4 20.5 24.6 28.7 32.8 36.9 41.0 45.1 49.2 53.3 57.4

14.00 5 . 2 1,200 17.3 21.7 26.0 30.3 34.7 39.0 43.3 47.7 52.0 56.3 60.7

10.00 6 . 3 1,451 21.0 26.2 31.4 36.7 41.9 47.2 52.4 57.6 62.9 68.1 73.3

11.00 6 . 9 1,596 23.1 28.8 34.6 40.3 46.1 51.9 57.6 63.4 69.2 74.9 80.7

12.75 8 . 0 1,850 26.7 33.4 40.1 46.8 53.4 60.1 66.8 73.5 80.2 86.8 93.5

15.60 9 . 8 2,263 32.7 40.9 49.0 57.2 65.4 73.6 81.7 89.9 98.1 106.2 114.4

16.00 10 . 0 2,321 33.5 41.9 50.3 58.7 67.1 75.4 83.8 92.2 100.6 109.0 117.4

16.50 10 . 4 2,394 34.6 43.2 51.9 60.5 69.2 77.8 86.4 95.1 103.7 112.4 121.0

18.25 11. 5 2,648 38.2 47.8 57.4 66.9 76.5 86.1 95.6 105.2 114.7 124.3 133.9

Pounds of Ma te ria l pe r Sma rtc ube S ize

6" x 6"

8" X 8"

7.8" x 9.4"

8" X 10"

9.5" X 9.5"

12" X 13"

Density/Volume Sizing

Typical Path Forward

• Product Samples for bag sizing.

• Palletization/filling trial

– Complete engineering audit

– Generate “criteria for success”

– Determine ROI.

• Initial order for Market trial and verification of ROI assumptions.

• Full-scale production/conversion to Smartcube.

• Joint quarterly and then annual business review