Thermal Energy International - June 2014

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Corporate presentation for Thermal Energy International (TSX-V: TMG) - a global provider of proprietary and proven energy efficiency solutions. Thermal Energy helps industrial, commercial and institutional operations worldwide save money and improve their bottom lines by reducing their fuel use and cutting their carbon emissions.

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<ul><li> 1 A more sustainable future... Today! TSX-V: TMG | Corporate Presentation | June 2014 </li> <li> 2 Forward looking statements Certain written and oral statements included in this presentation constitute forward-looking information. For example, statements about the opportunities for repeat business, additional orders, entry into new markets and growth of recurring revenue streams; energy savings and payback period experienced by customers; growth of pipeline, order backlog; introduction of new products and services and growth opportunities and strategies are all forward looking information. Such forward looking information reflects Thermal Energy Internationals current expectations with respect to future events and are based on information currently available to management. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from those that may be expressed or implied by such forward-looking information. Fulfillment of orders, installation and activation of product could all be delayed for a number of reasons, some of which are outside of the companys control, which would result in anticipated revenues from such projects being delayed or in the most serious cases eliminated. Orders in the companys backlog may not turn into revenue due to many factors, some of which are outside of the companys control, including but not limited to the companys ability to deliver products on time and in accordance with specifications and the continuing financial viability of the customer. Introduction of new products and services, entry into new markets, repeat business and growth opportunities will all be subject to company resources and market acceptance and may not be achieved as anticipated by the company or at all. Information as to amount of heat recovered, energy savings and payback period associated with Thermal Energy Internationals products are based on Thermal Energy Internationals own testing and average customer results to date. Actual results of Thermal Energy Internationals products will vary by installation. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this presentation. Readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this presentation and Thermal Energy International does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law. </li> <li> 3 Thermal Energy is a Global provider of energy efficiency &amp; emission reduction solutions to the ICI sectors We save our customers money &amp; improve their bottom lines by Reducing their fuel use and cutting carbon emissions 3 </li> <li> 4 Highlights 1 2 3 Large, fast growing global market with strong fundamentals Proprietary &amp; proven energy efficiency solutions provide high ROI Strong track record of growth 4 Growing global footprint </li> <li> 5 Large, fast-growing market 5 North American market &gt;$90B1 &gt;$450B1 Global investment in energy efficiency grew 15% to $3.9B in 2013 Global market Source: Pew Charitable Trusts, April 2014 1 Calculations based on data from U.S. Dept. of Energy, 2012 Energy Outlook </li> <li> 6 Strong market fundamentals 56% growth in global energy consumption expected 2010 - 20401 60% of all energy used is lost due to inefficiency 1 U.S. EIA, International Energy Outlook 2013 Energy efficiency represents significant cost reduction opportunities Investment more than offset by energy savings </li> <li> 7 FLU-ACE Direct contact condensing heat recovery GEM Condensate return systems (steam trap) ~80%We can recover of energy lost in typical boiler plant and steam system operations High ROI with short, compelling payback 16 year track record Proprietary, proven solutions 7 </li> <li> 8 FLU-ACE heat recovery Recovery of waste heat from process exhaust Return hot water for use in production or heating 1 system per location sells for $100k to millions each 37Worldwide Installations 90% 10-30% 2-5YEARS Recovery rate Reduction in energy costs Payback period Hot Air Cool Air Cool Water Hot Water </li> <li> 9 GEM steam trap Condensate return system Reduce steam loss &amp; improve efficiency vs. traditional mechanical steam traps No moving parts never needs replacing 100s to 1,000s of traps per location and sell for $500 to $1,000 per trap 65,000Traps installed worldwide 10-30% 1-2 year Reduction in energy costs Payback period </li> <li> 10 Proven across a number of industries Pharmaceutical 8 customers with 42 of &gt;350 sites penetrated Food &amp; Beverage 16 customers with 50 of &gt;1,600 sites penetrated Hospitals &gt;25 different hospitals Pulp &amp; Paper 11 customers with &gt;40 of 500+ sites penetrated Chemical / Petrochemical 11 customers with 18 of &gt;500 sites penetrated Significant repeat business Our success so far </li> <li> 11 June 3, 2013: $3.6 million heat recovery project 11 Strength in pulp &amp; paper industry &gt;$17 million in heat recovery and GEM business from multiple customers since 2006 11 </li> <li> 12 Sept./Oct. 2013: $1.9 million in heat recovery &amp; GEM orders from leading Fortune 500 food &amp; beverage company Repeat business in food &amp; beverage Working towards additional heat recovery and GEM orders at multiple sites with the same customer 7 orders to date </li> <li> 13 Cross selling to hospitals November 14, 2013: $1.2 million heat recovery order from a major hospital 13 &gt;$3.0 million in heat recovery &amp; GEM orders from major hospitals FY 2014 YTD </li> <li> 14 Our impact to date &gt; $398 Million Total fuel savings for our customers at $5/MMBtu 3.9M Tonnes Reduction of greenhouse gas emissions </li> <li> 15 Annual energy savings 49,282 149 The energy used by: The energy generated by: North American homes wind turbines with a capacity of 289 MW1 1 Estimated current cost of ~$500M </li> <li> 16 Multinational management team International sales team (representation in 28 countries) Extensive list of multinational customers Growing global footprint </li> <li> 17 Growing salesforce 17 8 2011 17 Small, self-sufficient distributors Sales &amp; marketing staff Small, self-sufficient distributors Sales &amp; marketing staff 6 Larger professional multi-line distributors Today 20 6 new sales &amp; marketing staff added in the last 6 months Actively looking for 3 additional sales &amp; marketing staff </li> <li> 18 Ranked 36th 5-year revenue growth of 1,502% Strong track record of growth (2007 to 2012) 18 </li> <li> 19 A challenging fiscal 2013 ($000s) FY 2013 FY 2012 Revenue 8,210 13,152 Gross profit 4,977 5,648 Net income (loss) (2,825) 101 Operating cash flow (1,244) 903 FY 2013 impacted by: $2.3M non-cash charge for goodwill impairment related to GEM business Temporary delay of major heat recovery projects Maturation of 2 large GEM accounts </li> <li> 20 Return to growth in fiscal 2014 YTD Highlights: Heat recovery sales up ~$1.5M GEM sales up &gt;$0.6M Received largest GEM order to date 9 Months FY 2013 12 Months FY 2013 9 Months FY 2014 $6.3M $8.2M $8.4M Revenue </li> <li> 21 Return to growth in fiscal 2014 ($000s) 9 Months 2014 9 Months 2013 Change Gross profit 4,236 4,231 +5 Net income (loss) (63) (162) +99 Operating cash flow 341 (1,020) +1,361 </li> <li> 22 Growing pipeline Strong order backlog $5.8M (May 12, 2014) Investment in sales and distribution starting to bear fruit Outlook 22 </li> <li> 23 Immediate growth opportunities Grow sales &amp; distribution capabilities in key markets North America, Europe &amp; the Middle East Established foothold in North America, U.K. and Italy, otherwise key markets are largely untouched Search firms on retainer for adding sales and marketing staff Develop additional corporate accounts Cross selling </li> <li> 24 Growth strategies Introduce new products &amp; services Grow recurring revenue streams Enter new markets Acquire complementary products and businesses </li> <li> 2525 Summary Large, fast-growing global market Proprietary &amp; proven solutions provide high ROI Strong track record of growth Growing global footprint </li> <li> 26 Listing summary TSX-V: TMG Recent Price: $0.11 52-Week Range: $0.03 to $0.14 # of Shares: 161.3 million Market Cap: $17.7 million Cash: $2.6 million Total Debt: Nil Share data as at June 2, 2014 Balance sheet data as at February 28, 2014 26 </li> <li> 27 A more sustainable future. Today. www.thermalenergy.com </li> </ul>