Burner Tec Deck 021314 FINAL
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Transcript of Burner Tec Deck 021314 FINAL
“GREEN isn’t GREEN unless it’s in the BLACK”
$500,000 Convertible Bridge Note Offering
EXECUTIVE SUMMARY
February 2014
$500,000 of 10% Convertible Bridge Notes and Warrants
(20 Units at $25,000 per Unit)
Each $25,000 Unit Includes One Convertible Promissory Note and 12,500 Five-Year Warrants.
The Convertible Promissory Note Generates an Annualized Cash Distribution of 10% (payable at the earlier of the closing of the subsequent offering or one (1) year).
All or a Portion of the Notes are Convertible, at the Option of the Investor, into Shares of the Company’s Subsequent Offering at a 15% Discount to the Subsequent Offering Price. Any Portion of the Notes not Converted will be Paid to the Note Holder at the earlier of the closing
of the subsequent offering or one (1) year.
Each Five-Year Warrant Entitles the Holder the Right to Purchase One Share of the Company’s Preferred Stock at a 15% Discount to the Company’s Subsequent Equity Offering
Share Price.
The Offering
Use of Proceeds
First Round $500,000
Pilot ProgramCapital Reserves and General Operating ExpensesOffering Expenses
The Company will use the Proceeds from this Raise to Construct and Install a Full-Size Working Model of the Company’s Unique, Proven and Proprietary Waste Heat Powered Brine Concentration System at an Oil and Gas Drilling Site.
• Recently Formed Wyoming Corporation Headquartered in San Diego, California
• Proven Management Team with Experience in Green Technology Development and Oil and Gas
• Exclusive Licensee of Proven, Proprietary Brine Concentration Technology
• The Company Provides On-Site Brine Processing and Electricity for the Large and Rapidly Growing Oil and Gas
Water Disposal Market
The Company
Executive Team
CARROLL NEWMAN JR, PE – PRESIDENTMr. Newman has spent 35 years in the domestic and international petroleum service sector. Most recently, Mr. Newman was a consultant for Ely and Associates primarily addressing their fracturing, as well as other product lines, cementing, stimulation, tools, testing, industrial cleaning and transportation. While consulting for Ely and Associates, Mr. Newman authored the fracturing principles and practices manual for Gulf International in the Sultanate of Oman and developed a pressure pumping manual for Saudi Aramco.
Previously, Mr. Newman was Vice President of Tucher Energy Services, Inc., where he established the first multi-product line specifically for the British Petroleum North American Gas Division. Mr. Newman has held various positions with Trican Well Services, Vanguard Energy Group, Jet Star Energy Services, Baker Hughes, British Petroleum, Inc. and Halliburton, Inc. Mr. Newman obtained his BSME in 1979 from Portland State University.
Executive Team
JASON SUNSTEIN – VICE PRESIDENT AND SECRETARYMr. Sunstein brings finance, mergers and acquisitions and general management experience. Mr. Sunstein also serves as Vice President Finance and Director of Earth Dragon Resources, Inc., a publicly-traded precious metals company. Mr. Sunstein co-founded ubroadcast, Inc., now known as the Santeon Group, Inc., a publicly-traded technology company that offers products and services in Agile training and transformation, healthcare and media. Prior to Santeon, he founded one of the first publicly-traded VoIP (Voice over Internet Protocol) companies in the United States. Mr. Sunstein received a Bachelors of Science from the San Diego State.
PAUL WYNNS – VICE PRESIDENT OF PRODUCT DEVELOPMENT AND DIRECTOR Paul Wynns is a product and project manager with cross-disciplinary experience in military aviation and defense aerospace technology programs. His education includes an aerospace M.S. degree from Stanford University and an internship at the NASA Ames Research Center. His training and educational background includes multiple technical and program management certifications from the Defense Acquisition University. Mr. Wynns’ experience includes management of project teams with emphasis on installation, maintenance, and evaluation of General Electric TF-34 turbofan engines.
Advisory BoardDR. DAVID BOYLAN – ADVISORPhD. in Chemistry from the University of Hawaii and a post doctorate at the University of California, Berkeley. Dr. Boylan has a diverse background in chemistry, biology and engineering. At Greenfield Environmental he developed ways to chemically or biologically detoxify contaminated ground area water. An off shoot of this work lead to the formation of a lab to study and develop biological methods for the conversion of synthesis gas to liquid fuels. At United Energy, he developed low temperature solar operated alcohol fuel distillation system, and developed integrated bio-systems for the production of water, fuels and food. He was involved with new methods to generating electricity from photovoltaics and integrated co-generation systems. At Del Mar Farms, Dr. Boylan designed and implemented an integrated fish/ hydroponics vegetable farm using recycled water. The farm concept was successfully applied at a commercial level. BRT’s low temperature, ambient pressure vapor distillation system, also known as a Supplemental Recovered Thermal system (SRT), currently being utilized by Burner Technology was developed at this time.
Dr. Boylan’s work successfully has been implemented in the bottled water industry utilizing solar thermal energy and sea water to produce a high end bottled water.
As the Chief Scientist for Burner Technology and Research Corporation, Dr. Boylan has designed and successfully tested the Brine Concentration System utilizing waste heat.
AMAN (”ALEX”) SINGHA – ADVISORMr. Singha has successfully worked with management of various companies from developing strategy, acquisitions and divesting of assets, operations, legal, financing and fundraising oversight, concentrating in the United States energy sector for the last nine years.
He has worked with various leading venture capital firms (Kleiner Perkins, Draper, NEA, etc.) having investors invest alongside such firms in their portfolio companies.
He recently served as President and COO of AuraSound, Inc. , where as a member of the management team, increased sales 10 fold to $76MM and reduced SG&A by 5 times to 5.5% of revenue over the course of 12 months.
Prior to this he practiced corporate law for 8 years and received a JD from NYLS, BA in Political Science from Simon Fraser University and is published in “The Venture Capital Legal Handbook – Industry Insiders on the Laws and Documents That Govern VC Deals, Raising Capital, Mergers & Acquisitions & More.” Including transactions where he served as attorney, in total, he has participated in transactions valued close to US$5 billion
Advisory Board
Hydraulic Fracturing Industry Facts
In 2013, Fracking has Occurred in at least 17 States with about 82,000
Wells Operating Nationally
Oil and Gas Fracking boom lead the U.S. Energy Information
Administration to predict the U.S. will be a net exporter of natural
gas by 2016
In 2012, the Fracking Industry Generated $46 Billion in Revenue
45% of Domestic Natural Gas Production and 17% of Oil Production would be lost within 5 Years without the use
of Hydraulic Fracturing
U.S. Fracking Operations Produced an Estimated 280 Billion Gallons of
Wastewater in 2012
Hydraulic Fracturing has Boosted Local Economies-Generating Royalty Payments to Property Owners, Providing Tax Revenues to the Government
and Creating Much-Needed High-Paying American Jobs
Problems/Opportunity• An average of 2.5 million gallons of water are used to frack a well
• Drilling operators are spending between $20 and $30 BILLION on Water Disposal
• Wastewater, also known as “produced water”, is stored in ponds for partial evaporation, with the remainder being shipped offsite for disposal.
• Brine water produced can be more than 6 times as salty as sea water
• The most common disposal method is the transportation and re-injection of the brine into non-producing wells.
• Produced water is transported from drill sites by tanker trucks at significant cost. Traffic congestion, noise and damage to roadways caused by these vehicles have become points of contention with local permitting entities and residents in proximity to drilling operations.
• Oil Companies in North Dakota burn off or waste one third of the natural gas they are extracting. Essentially burning more than $100 Million every month.
• Diesel powered generators used to produce electricity on many drill sites are expensive and increase carbon footprint.
Fracking and Water: A New Way To Profit from the
Industry's Biggest Problem
By Kieth Schaefer, OilPrice.com | Tue, 14 February 2012
While oil and water don’t mix, for the fracking industry... the two go hand-in-hand. You see,
while WATER is one of the oil industry’s biggest threats – it's also one of investors’ biggest
opportunities.
Consider this: Each horizontal well in North America that uses hydraulic fracturing, or
fracking, uses 2-6 MILLION gallons of sweet fresh water. And the entire North American
industry will use an estimated 72 BILLION gallons in 2012.
That's why a multi-billion dollar Water Services industry is emerging right now in the oil
patch. It’s a huge opportunity for some great capital gains
North Dakota on Fire: One Man's Quest to Turn Wasted Gas Into PowerBy Blaire Briody, NationSwell.com / February 11, 2014And the flames won’t go out anytime soon. Ever since oil companies figured out they could tap the 170 billion barrels of crude oil underground with the new technology known as fracking, they’ve been digging wells as fast as they can, producing a modern-day black gold rush. The boom, which began in 2007, has attracted thousands of workers, lured by word that 22-year-olds with no previous job experience to speak of were suddenly raking in $100,000 a year. Temporary camps were hastily assembled to house the newcomers. As the rest of the country wrestled with recession, North Dakota’s unemployment rate dropped to 3 percent—the lowest in the nation. The cost of living shot up. Crime soared. But as long as the ground keeps gushing, there’s no incentive to slow down. Today, there are more than 8,800 active wells in the state, producing 783,000 barrels of oil a day. Local officials estimate they’ll drill 42,000 more wells in coming years, and there could be a roaring natural gas flare on every one.The problem is, the drilling releases thousands of cubic feet of natural gas. Oil companies burn off one-third of the natural gas they’re extracting, according to a recent study—which in May 2013 amounted to over 266,000 thousand cubic feet spewing into the air every day, a number that has nearly tripled since 2011. (In comparison, Texas flares less than 1 percent of its natural gas.) By failing to capture the gas, companies in North Dakota are essentially burning away more than $100 Million every month! The state’s boom has happened so quickly, companies simply haven’t had time to build the pipelines needed to capture the gas. The flares carry toxins; they emit as much carbon dioxide as a million cars do every year. More than 60 types of pollutants have been identified downwind from flaring operations—many of which are known to cause cancer and other diseases with prolonged exposure. The fact that oil’s market value is currently 30 times that of natural gas may have slowed the search for a solution.
Fracking with Natural Gas to Trim Fuel Costs 40%Posted on January 7, 2013 at 9:29 am by Zain Shauk Apache Corp this month is set to become the first company to power an entire hydraulic fracturing job with engines running on natural gas, cutting fuel costs by about 40 percent, an executive said.In 2012, the oil and gas industry used more than 700 million gallons of diesel for hydraulic fracturing, at an estimated cost of around $2.38 billion, according to Apache. Switching to field gas, the industry could cut its fuel costs by 70 percent, or about $1.67 billion, the company estimated.
May 1, 2012
Frack Water Market to Reach $9bn in 2020, Lux
Says The market for treating hydraulic fracturing water – a waste byproduct of shale gas
production — will grow nine-fold to $9 billion in 2020, according to a report by Lux
Research.The growth in hydraulic fracturing has energized the water industry, inspiring a
bumper crop of new water treatment startups aiming to treat the challenging flowback
water, according to the report, Risk and Reward in the Frack Water Market. Despite the
opportunities in this growing market, only a few companies are positioned to profit,
Lux said.
Shale Fracking Proves $30 Billion-A-Year Boon to Waste Disposal Industry Mark Schleifstein, NOLA.com | The Times-Picayune on May 20, 2013The explosive expansion of drilling of natural gas and oil wells in shale deposits in the United States and Canada using a directional drilling method dubbed “fracking” may have spawned a $30 billion per year expansion of the waste disposal business, waste and investment industry executives were told Monday. Oil and gas fracking represents a $200 billion-a-year capital investment, and the companies doing the drilling are spending between $20 billion and $30 billion on waste disposal, said Michael Hoffman, managing director at Wunderlich Securities,
Harvesting Natural Gas: Fracking Paul Glanville, Principal Engineer at the Gas Technology Institute, May 2012As with all resource development, with the extraction of shale gas come numerous challenges to minimize its environmental impact, the rapid nature of this boom compounded these challenges. Put simply fracking is the injection of water under high pressures in deep wells to fracture gas bearing shale formations, so it is no surprise that its impact on water quality impact is critical. With the large amount of water required for fracking operations, its reuse, treatment, and transportation are a “major operational component and cost of shale gas development going forward”.The salt content of produced water creates challenges in its treatment and disposal, as typical produced water has a salt content of 50 – 250 g/L of dissolved salts compared to 38 g/L for seawater. Put into perspective, the salt output of a development area in a typical Pennsylvania county (roughly 1,000 wells) will produce more salt per year than the entire state uses for roads over a decade, with transport and treatment of brine on the order of $10 million per year per development area. As an alternative this costly practice of the interstate hauling and deep well disposal of wastewater brine, Tom and his team are currently investigating several methods of wastewater concentration and treatment. They have investigated methods that simply concentrate brines, reducing the brine volume from 10-20% up to 50-70%, reducing transportation costs, however if produced wastewater is treated instead of disposed, Tom notes, the impact of hauling is minimized – with reduced trucking emissions, road wear, and traffic.
The Burner Technology Solution
Value to an Oil and Gas Fracking OperatorReduces Cost of…
• Electricity• Water • Treatment of Processed Water
A Modular, Mobile, Waste Heat Powered Brine Concentration System
Other Social Benefits…• Lower Dependence on Local Water
Supply• Reduced wear and tear on local
roads• Reducing carbon footprint (truck
and generator)
With NO Capital Outlay to the Oil and Gas Drilling Operator!
Brine Concentration System Diagram
Prototype Waste Heat Powered BCS Unit
Original Working Model of a Mobile BCS Unit
Advantages of the BCS Technology Low Capital Expense
Powered by Waste Heat…NOT Electricity!
Utilizes Low Grade Waste Heat (140 F-18 � 0 F) �
Produces Electricity
Significantly Reduces Transportation Costs of Water and Brine Delivery and Removal
Social Benefits- Reduced Dependency on Local Water Resources & Lowering Carbon Footprint
Modular, Mobile and Expandable Depending on Site-Specific Requirements
Operates at Atmospheric Pressure
Easy to Clean and Operate
Low Temperature Allows for Lower-Cost Plastic instead of Titanium Construction
Meets Sustainable Technology Criteria: Addresses Water-Constraint and Closes the Energy Loop
Technology Development
Technology was Originally Proven Successful with the Development of a Solar Thermal Powered Sea Water Desalination Plant for the
Bottled Water Industry
Revenue ProjectionsPROJECT NAME: Burner Technology BCS1
EXPENSES Initial Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Equipment $ 300,000
Installation $ 200,000
Gas $ 39,398 $ 39,792 $ 40,190 $ 40,592 $ 40,998 $ 41,408 $ 41,822 $ 42,240 $ 42,663 $ 43,089
Repair & Maintenance $ 16,451 $ 16,615 $ 16,781 $ 16,949 $ 17,119 $ 17,290 $ 17,463 $ 17,637 $ 17,814 $ 17,992
Other $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total $ 500,000 $ 55,849 $ 56,407 $ 56,972 $ 57,541 $ 58,117 $ 58,698 $ 59,285 $ 59,878 $ 60,476 $ 61,081
INCOME Inflation 1.0%
Electricity $ 131,328 $ 132,641 $ 133,968 $ 135,307 $ 136,660 $ 138,027 $ 139,407 $ 140,801 $ 142,209 $ 143,631
Water $ 76,295 $ 77,058 $ 77,829 $ 78,607 $ 79,393 $ 80,187 $ 80,989 $ 81,799 $ 82,617 $ 83,443
Concentrated Brine $ 100,607 $ 101,613 $ 102,629 $ 103,655 $ 104,692 $ 105,739 $ 106,796 $ 107,864 $ 108,943 $ 110,032
Tax Credits $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Depreciation Tax Benefit $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Total $ - $ 308,230 $ 311,312 $ 314,425 $ 317,570 $ 320,745 $ 323,953 $ 327,192 $ 330,464 $ 333,769 $ 337,107
Net Cash Flow ($500,000) $ 252,381 $254,905 $257,454 $260,028 $262,629 $265,255 $267,907 $270,587 $273,292 $276,025
Cumulative Cash Flow ($500,000) ($247,619) $7,286 $264,740 $524,768 $787,397 $1,052,652 $1,320,559 $1,591,146 $1,864,438 $2,140,463
1 1 0 0 0 0 0 0 0 0 0
Discount Rate 5.00%
Savings Year 1 $252,381
Savings Year 2 $254,905
Savings Year 3 $257,454
Savings Year 4 $260,028
Savings Year 5 $262,629
5 Year IRR 42% 10 Year IRR 51%
5 Year NPV $584,447 10 Year NPV $1,457,876
Payback Period (Years) 2
Revenue Projection Summary
1 BCS Unit Being Used 8 Months per YearBCS Unit Could be Used on One Site or Multiple Sites
5 Year Cumulative Cash Flow: $787,3975 Year IRR: 42%
10 year Cumulative Cash Flow: $2,140,46310Year IRR: 51%
“GREEN isn’t GREEN unless it’s in the BLACK”
Investor Exit StrategyUpon the Completion of the Follow-Up Venture Capital Round, Bridge Note Investors Will Have Two Options…
Do NOT Convert and Receive All Principal and Interest at the Close of the Follow-Up Round or at the End of
One Year, Whichever is Sooner.
Convert all or a portion of the Note and Interest into Burner Tech Preferred Stock at a 15% DISCOUNT to the Follow-Up VC
Round Valuation
OPTION # 1 OPTION # 2
WARRANTS
Bridged Note Investors Receive One (1) 5-Year Warrant for Every $2.00 Invested (12,500 Warrants for every $25,000 Invested).
Warrant Exercise Price will be set at a 15% Discount to the Follow-Up VC Round Valuation.
For More Information Contact
Jim Thomas(949) 466-9149