INVESTOR PRESENTATION MAY-2016 - IR...

INVESTOR PRESENTATION MAY-2016

©2016 QuantumSphere, Inc. (QSI) All Rights Reserved.

OTCQB: QSIM

Kevin MaloneyChairman & CEO

949-378-9851

[email protected]

DISCLAIMER:

This presentation is provided for information purposes only and should not be construed as an offer, and shall not form part of an

offer, or solicitation to buy or sell any securities or derivatives. It should not be considered as an invitation to subscribe for or purchase

any securities in QuantumSphere, Inc. or as an inducement to make an offer or invitation with respect to those securities. No

agreement to subscribe for securities in QuantumSphere, Inc. will be entered into on the basis of this presentation.

To the maximum extent permitted by applicable laws, QuantumSphere and its affiliates make no representation and can give no

assurance, guarantee or warranty, express or implied, as to, and take no responsibility for the authenticity, validity, accuracy, suitability

or completeness of, or any errors in or omission, from any information, statement or opinion contained in this presentation.

FORWARD LOOKING STATEMENTS:

Any information provided with this presentation related to timing, price, volume, and projected revenue are forward-looking statements

and represent management’s best estimates as to its future performance. As such, these statements are not guarantees of future

performance and are subject to high risks, uncertainties, and assumptions that are difficult to predict. Therefore, our actual results

could differ materially and adversely from those expressed in any verbal or written forward-looking statements as a result of various

factors beyond our control.

PAGE 1Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM

Public Company Background

PAGE 2

• Founded in 2002 as an R&D company

Focused on industrial chemicals sector

• Became publicly traded in 2014 | Symbol: QSIM

• ~$32M in equity financing secured to date

~$7M in cash from board and management

• Recent Stock Price: $.55 | Market Cap: $12.4M

• ~22.6M Shares Outstanding |~6.2M Public Float

• ~39.6M Shares Fully Diluted

~11.6M Warrants | ~5.5M Options |~$25M Cash Value

• NASDAQ Uplisting Anticipated in 2016

QuantumSphere

OTCQB: QSIM

Improving Chemical Production Efficiencies With Advanced Technologies OTCQB: QSIM

QSI is Transforming the Chemicals Industry

PAGE 3

• QSI products address key chemical production inefficiencies

• Lead chemical: $100B market, critical to global food supply

• 100’s of plants globally can benefit from QSI value proposition

• Lead ammonia product, FeNIX™, commercially validated

• JDA & sales agreement in place with industry leader, CASALE

• ~$50-100M/year revenue potential for lead product, FeNIX™

• Volume production capacity in place – backed by extensive IP

• QSI is poised for long-term profitable growth

QuantumSphere

OTCQB: QSIM


Highlights

15% Energy savings

QSI Technology can add Billions in Annual Revenue to the World’s Most Critical Chemical Process…

…With a 10% Increasein Production Output.

• ~$100B Global Market; ~200M Tons/year

• World’s Most Critical Chemical

~82% Used for Agricultural Fertilizer

Enables Global Food Supply and Population

• Responsible for:

~50% of All Protein

~2% of Global CO2 Emissions

~5% of World’s Natural Gas Consumption

~2% of World’s Energy Consumption

• Production:

~600 Ammonia Plants Worldwide

Highly Inefficient Production Process

QSI Technology Increases Chemical Plant Profits

PAGE 5

Focus on Ammonia for Global Food Supply



Standard Ammonia Catalyst

FeNIX™ Nano-Coated Catalyst

FeNIX™ Nano Catalyst Accelerator

FeNIX™ Increases Catalyst Surface Area and Performance

Catalytic reactions happen on the surface of the catalyst. Higher surface area = improved catalytic performance. Leveraging QSI’s patented process, a handful or ~15 grams of QSI’s FeNIX™ Nano Iron catalyst accelerator has the surface

area of about the size of a basketball court, or ~5000 square feet compared to the size of about one sheet of paper.

“Turbo-Charging” Ammonia Production

PAGE 7

High Surface Area FeNIX

Nano-Coated Catalyst

Ammonia

Converter


10-15% Increase in

Ammonia Plant Efficiency

FeNIX™High Performance

Catalyst Accelerator

High Surface Area = Increased Efficiency = Greater Profits

U.S. Patent No: 9,272,920

Partnership Executed with Industry Leader

PAGE 8

• Joint Development

Agreement, May 2015

• Global Ammonia

Technology Leader

• ~40% of Global Production

• CASALE’s Exclusive Nano

Catalyst Provider

• Commercial Sales

Agreement, March 2016


Casale converter technology critical

to global ammonia production Hundreds of ammonia plants worldwide can

benefit from increased production efficiency

2 Key Channels for Market Penetration


1. Converter

Technology

2. Catalyst

Technology

2 technologies required for ammonia production

2 ways QSI penetrates the ammonia market

Additional market access, less risk

FeNIX™ is a competitive advantage to converter & catalyst providers

FeNIX™ Nano Catalyst

Accelerator Technology

Leading Converter

Providers

Leading Catalyst

Providers

Dominant

Producers

QSI in the Value Chain

JDA & commercial sales

agreement with Casale


No QSI sales force required – leverage existing partner networks

CASALE is Driving QSI Commercialization

PAGE 11

• Conservative industry: multi-year/multi-step process

• Many driving forces; Economics, Regulatory, Social

• QSI commercialization in final stages, led by CASALE

Initial Commercialization – (2H-2016)

Commercial Sales Agreement – Casale (2016)

Commercial Plant Validation – China (2015)

Completed Manufacturing Facility – QSI (2014)

External Lab Validation – China (2014)

Internal Lab Validation – QSI (2009 – 2013)


QSI Offers a Compelling Value Proposition

PAGE 12

100’s of ammonia plants globally could benefit

•10-15% Increase in Catalyst ActivityBased on 2015 commercial plant validation

•Strong ROI & IRR for Ammonia Producers~2 year payback; typical catalyst life ~10 years

•Two Ways Ammonia Plant Operators Win:


1. Production Increase

2. Energy Savings

A 5% increase in production output can translate to millions in revenue annually for a typical large-scale ammonia plant

Delivering Shareholder Value

QSI Profit Economics

• Strong Gross Margins

QSI Production Capacity

• Current Manufacturing Facility:

2–3 Plants per Year

Up to $15M in Annual Revenue Potential

• Economically Scalable Manufacturing Facility:

~$10M CapEx Investment Can Deliver

up to $75M in Annual Revenue to QSI


Patented High-Volume Production

PAGE 14

Economically Scalable | Highly Automated | Extensive IP

Inputs Vaporize Passivate Package

STEP

1STEP

2STEP

3STEP

4


U.S. Patent No: 7,282,167

FeNIX™ Increases Catalytic Performance


Standard Ammonia Catalyst

FeNIX™ Nano-Coated Catalyst

FeNIX™ Nano Catalyst Accelerator

• 10 Issued Patents

• 12 Years of “Know-How”

• High Surface Area Effect 12kgs of FeNIX™ Nano Iron Accelerator

Will Coat Nearly One Ton of Existing

Commercial Ammonia Catalysts

Large Pipeline of Chemical Opportunities

PAGE 16

QSI may ultimately improve many chemical processes

Olefins

Methanol

Ammonia FilterMethanol

Olefins

Ammonia

Ethylene Oxide

Fluid Cat Cracking

Hydro-processing

Bio-RenewablesPoly-olefins

Fischer-Tropsch

Hydrogen

Polyurethanes Syngas

Sulfur Recovery

Methanation

More… Parafins

~$1.5 Trillion in Basic Chemicals Produced Annually

Up to 90% of all Industrial Processes Utilize Catalysts

---------------------------

~$450B

--------------------------


~$2B Total Available Market

PAGE 17

Total Market: ~$100B ~$300B ~$50B

Total Available

Market (TAM):~$250M ~$1.5B ~$250M

QSI Addressable

Market*:~$50-100M ~$300M+ ~$50M+

End Products:Agricultural

FertilizerPolymers, Plastics

Paint, Adhesives,

Fuels

Product Status:Anticipated

2H-2016

Lab Validations

in Progress

Lab Validations

Pending

C2-C4NH3CH4O

Ammonia MethanolOlefins


*QSI Addressable Market is based on a blend of increased production and energy savings in plants directly accessible through Casale partnership.

d

Target Objectives and Next Steps

PAGE 18

QuantumSphere

OTCQB: QSIM

OPERATIONAL

• Execute commercial agreements with

additional industry-leading partners

• Complete follow-on commercial reactor

validation utilizing Casale technology

• Secure purchase orders via existing CASALE

channels for FeNIX™ ammonia catalyst sales

• Further validate follow-on nano catalyst

accelerator products for Methanol and Olefins

• Continue to expand production capabilities to

meet demand and protect IP


Experienced Management Team

PAGE 19

Substantial business and technical qualifications to execute QSI strategy

~$7M in capital invested by Management, Board, and Advisors

Kevin Maloney, MBACo-Founder &

Chief Executive Officer

• 21 years of experience in sales, marketing, and finance

• Formerly at PIMCO and First American Corporation

• Experienced entrepreneur with previous start-up experience

Gregory Hrncir, Esq.Chief Strategy Officer &

General Counsel

• 22 years of experience in corporate, securities, M&A and technology start-ups

Steve Gillings, MBAChief Financial Officer

• 30 years of accounting experience at multiple public companies

Matthew Griffith, MBAVice President, Operations

• 10 years of experience in commercialization and development of advanced materials and

clean energy systems

Vito Canuso, Esq.Vice President,

Intellectual Property

• 20 years of IP litigation/portfolio experience with top IP law firm Knobbe, Martens, Olson, and

Bear LLC

• Held senior position at Medtronics


Seasoned Board & Management Advisors

PAGE 20

Marc Goroff, Ph.D. • Chief Technology Officer and co-founder, Quorum Technologies.

• Serial hardware and software technology entrepreneur

• Earned Ph.D. in Theoretical Physics from Caltech at age 23

Steven Myers • Chairman of Dolphin Capital Holdings, Inc., a private equity investment company

• Chairman of Governance & Nominating Committee of Neostem, Inc., a biosciences company

• Former Founder & CEO of SMA, an aerospace & defense mgmt consulting services business

Jeff Palmer, MBA • Founder & CEO of Rimports, $150M+ manufacturer of consumer products in major retailers

• Finalist in the Utah regional competition for 2012 Ernst & Young Entrepreneur of the Year

• Former Far East Area Director for ICON Health & Fitness in Hong Kong, fluent in Mandarin

and Cantonese

Francis Poli, Esq.

Lead Director and

Compensation Committee Chair

• General Counsel and Executive Vice President, Cohen and Steers, Inc. (NYSE: CNS)

• Former Chief Legal Officer and Compliance Committee Chair with PIMCO and Allianz

• Former JP Morgan counsel

Robert Venable, MBA/CFA • Managing Director and Chief Financial Officer, SW Asset Management, LLC.

• Former Chief Investment Officer at First American Corp, Capital Mgmt Division (NYSE: FAF)

• Vice President in Charge of Global Asset Allocation at PIMCO


Notable Technology Advisory Board

PAGE 21

Jared Cohen • Director of Google Ideas

• Co-Author with Google’s Chairman, Eric Schmidt; The New Digital Age – Reshaping the Future of

People, Nations, and Business

• Named one of the 100 Most Influential People in the World by Time Magazine – May 2013

• Stanford / Oxford / Rhodes Scholar

Bill Collins • Managing Director of Global Resource Management Consultancy (GRMC)

• Key executive at International Rectifier, ramping the company from $60M to over $700M in Revs

• Frequent industry panelist and guest lecturer at CalTech, USC and LARTA

• Past President, Tech Coast Angels, Los Angeles

Jon Faiz Kayyem, Ph.D. • Member, Caltech Board of Trustees

• Founder, CMS (Acquired by Motorola)

• Chief Technology Officer, GenMark (NASDAQ: GMRK)

Prof. George Olah, Ph.D.Nobel Prize Winner

• Nobel Laureate (Chemistry, 1994) for research involving the generation and reactivity of

carbocations via superacids

• Priestley Medal (American Chemical Society)

• Distinguished Professor of Chemistry and Chemical Engineering and Materials Science

• Director of the Loker Hydrocarbon Research Institute

• Dr. Olah served on the QSI Board of Advisors from Dec. 2005 through his retirement in Dec. 2014


Transforming the Chemicals Industry

PAGE 22

• QSI technology increases chemical production efficiency

• Compelling value prop for 100’s of chemical plants globally

• Lead ammonia product, FeNIX™, commercially validated

• JDA & sales agreement in place with industry leader, CASALE

• ~$50-100M/year revenue potential for lead product, FeNIX™

• QSI R&D complete – initial commercialization in final stages

• Volume production capacity in place – backed by extensive IP

• QSI is poised for long-term profitable growth

QuantumSphere

OTCQB: QSIM


Summary

QSIM - 3 Key Takeaways

Addressing Significant Market PainsUnique technology addresses key inefficiencies in large chemicals industry

With Compelling & Profitable SolutionsValue proposition worth billions to 100’s of chemical plants worldwide

Driven by World-Class PartnersCommercialization led by global technology leader, CASALE

PAGE 23

Thank You!


Contact Information

Kevin Maloney, MBA Gregory Hrncir, Esq.Chairman & CEO General Counsel & CSO

949-378-9851 818-400-5930

[email protected] [email protected]

PAGE 24

Contact Info:QSI-Nano Catalyst Production Facility; ~4 Metric Tons per Year Capacity


mailto:[email protected]

mailto:[email protected]

INVESTOR PRESENTATION MAY-2016 - IR...

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