Attached files
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| 8-K - FORM 8-K - COOL TECHNOLOGIES, INC. | hpev_8k.htm |
EXHIBIT 99.1
Investor Presentation
March 2014
March 2014
2
Forward Looking Statements
This presentation contains information that is “forward-looking” in that it describes events and conditions HPEV, Inc.
reasonably expects to occur in the future. Expectations for the future performance of HPEV, Inc. are dependent upon
a number of factors, and there can be no assurance that HPEV, Inc. will achieve the results as contemplated herein.
Certain statements contained in this release using the terms “will”, “could”, “may”, “expects to”, “potential”,
“planned”, “expected”, “estimates”, “schedule”, “anticipates”, and other terms denoting future possibilities, are
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The accuracy
of these statements cannot be guaranteed as they are subject o a variety of risks, which are beyond HPEV, Inc.’s
ability to predict, or control and which may cause actual results to differ materially from the estimates contained
herein. Among these risks are those set forth in HPEV, Inc.’s Form 10-K and in reports subsequently filed with the
Securities and Exchange Commission, and in addition to the other risks and caveats included in this presentation. It is
important that each person reviewing this presentation understand the significant risks attendant to the operations of
HPEV, Inc.
reasonably expects to occur in the future. Expectations for the future performance of HPEV, Inc. are dependent upon
a number of factors, and there can be no assurance that HPEV, Inc. will achieve the results as contemplated herein.
Certain statements contained in this release using the terms “will”, “could”, “may”, “expects to”, “potential”,
“planned”, “expected”, “estimates”, “schedule”, “anticipates”, and other terms denoting future possibilities, are
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The accuracy
of these statements cannot be guaranteed as they are subject o a variety of risks, which are beyond HPEV, Inc.’s
ability to predict, or control and which may cause actual results to differ materially from the estimates contained
herein. Among these risks are those set forth in HPEV, Inc.’s Form 10-K and in reports subsequently filed with the
Securities and Exchange Commission, and in addition to the other risks and caveats included in this presentation. It is
important that each person reviewing this presentation understand the significant risks attendant to the operations of
HPEV, Inc.
Except as required by law, HPEV, Inc. disclaims any obligation to update any forward-looking statement contained
herein.
herein.
3
Company Snapshot
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Symbol:
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OTCQB: WARM
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Recent Price:
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$ 1.85
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52-Week High/Low:
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$ 2.00 - $ 0.23
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Common Shares
Outstanding(1): |
48.7 million
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Options/Warrants(1)(2):
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30.1 million
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Market Capitalization:
Enterprise Value:
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$ 90 million
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$ 90 million
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Source: Capital IQ, company filings
(1)As of 9/30/2013
(2)Options 5M, Warrants 15.1M, 200 Convertible Preferred Shares that convert to 10M common
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Sector:
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Industrial Engineering
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Year Founded / Public:
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2005 / 2011
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Headquarters:
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Tampa, FL
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Headcount:
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8 full time - 45 contract
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Insider Ownership:
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37.5%
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Auditor:
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Anton & Chia, LLP
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Fiscal Year End:
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December 31st
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March 2014
4
Heat is the waste by-product of mechanical
energy - the ugly evidence of inefficiency
energy - the ugly evidence of inefficiency
• The efficient removal of heat from equipment is a paramount challenge for manufacturers of motors,
generators, and pumps, and many other types of mechanical equipment and products
generators, and pumps, and many other types of mechanical equipment and products
○ Excess heat results in lower power output for equipment such as motors & generators and
others
others
○ Manufacturers must compensate for these thermal losses in their engineering by adding greater
amounts of Active Material (the expensive part of the motor/generator: larger rotor/stator sizes,
heavier gauge wiring and seals, etc.) when manufacturing, thereby increasing product costs
amounts of Active Material (the expensive part of the motor/generator: larger rotor/stator sizes,
heavier gauge wiring and seals, etc.) when manufacturing, thereby increasing product costs
• Less Active Material used in manufacturing results in lower costs (better margins), and the
engineering reality that smaller motors can put out more power (and potentially be sold for
more)
engineering reality that smaller motors can put out more power (and potentially be sold for
more)
• Worldwide environmental and efficiency mandates are being implemented in motors and generators
in three steps: 2013, 2015, 2017(1)
in three steps: 2013, 2015, 2017(1)
(1) International Electrotechnical Commission’s IE3 standards and Minimum Efficiency Performance Standards (MEPS)
March 2014
5
The Solution
HPEV’s patented technology
removes heat better than the
current cooling methods: air
cooling or liquid cooling
removes heat better than the
current cooling methods: air
cooling or liquid cooling
• HPEV’s disruptive thermal dispersion technology transfers heat via
proprietary patented heat pipe arrays with unique capabilities
proprietary patented heat pipe arrays with unique capabilities
• HPEV’s heat pipe arrays and systems allow heat pipes to move heat
in ANY direction (even against gravity) and require little or no
maintenance
in ANY direction (even against gravity) and require little or no
maintenance
○ Heat pipes can be added to almost any electric motor or generator
resulting in a smaller, more efficient, higher output machine that runs
cooler with a longer operating lifespan and lower maintenance costs
resulting in a smaller, more efficient, higher output machine that runs
cooler with a longer operating lifespan and lower maintenance costs
○ Independent third-party & customer testing confirms motors and
generators operating with HPEV’s technology have 25-40% higher
“power density” or horsepower output
generators operating with HPEV’s technology have 25-40% higher
“power density” or horsepower output
○ Higher power density results in up to 30% lower manufacturing costs as smaller motors can put out the
same amount of power and manufacturers can use standard raw materials (wire, insulation, etc.) instead
of costly exotic raw materials
same amount of power and manufacturers can use standard raw materials (wire, insulation, etc.) instead
of costly exotic raw materials
March 2014
6
Heat Pipes
• A heat pipe is a heat-transfer device that, at a basic level, consists of a bifurcated hollow metal pipe
filled with water that moves heat from one end to the other via evaporation and condensation within
a closed system
filled with water that moves heat from one end to the other via evaporation and condensation within
a closed system
• Heat pipes have been around since the late 1800’s, and beginning in the late 1970’s and 1980’s
engineers began applying the technology to industrial applications
engineers began applying the technology to industrial applications
• HPEV’s intellectual property consists of application patents and patents-pending that, in conjunction
with unmatched engineering expertise, allows OEMs to implement HPEV’s designs into their
existing manufacturing systems and ensure manufacturability down the production line
with unmatched engineering expertise, allows OEMs to implement HPEV’s designs into their
existing manufacturing systems and ensure manufacturability down the production line
March 2014
7
Intellectual Property
• While heat pipe technology has been around for over 100 years, HPEV controls a patent portfolio
that leverages a unique ability to increase power density and lower manufacturing costs in the motor
and generator industry, among additional markets
that leverages a unique ability to increase power density and lower manufacturing costs in the motor
and generator industry, among additional markets
• Five U.S. utility patents have been issued
• More than 20 Patent Cooperation Treaty (PCT) patents are pending or in the application
process
process
• Patent Attorney: Polster, Lieder, Woodruff & Lucchesi, L.C.
March 2014
8
Technology Applications
Thermal Dispersion
• Electric Motors
• Generators
• Submersible Pumps
• Industrial Pumps
• Compressors
• Bearings
Mobile Generation
• Retrofit any Class 2-8
truck
truck
• “Ultimate Work Truck”
• Eliminates the need for
expensive, tow-behind
mobile generators
expensive, tow-behind
mobile generators
Future Applications
• Hybrid Conversion
• Vehicle Components
• Engines
• Super Chargers
• Industrial
• Power Systems
March 2014
9
Thermal Dispersion
HPEV’s Thermal Dispersion technology is poised to be the most disruptive and ONLY
technology (resulting in more than 5% cost savings) introduced to the industrial
motor/generator industry since the introduction of the frameless DC motor in the 1950s(1)
technology (resulting in more than 5% cost savings) introduced to the industrial
motor/generator industry since the introduction of the frameless DC motor in the 1950s(1)
(1) CEO Tim Hassett’s father, Jack Hassett, invented the frameless DC motor
Benefits to End User
Benefits to Manufacturer
• Easy integration on existing production lines
• More output from the same package or the
same output from a smaller package
same output from a smaller package
• Increased standardization of product line as a
result of a reduction in product modifications
result of a reduction in product modifications
• Scalable application from 1 to 30,000hp
• Better reliability
• Lower maintenance costs
• Increased effective lifespan of motor
• Greater efficiency, therefore lower energy
costs
costs
• Lower purchase cost (provided manufacturer
passes savings along to the end user
passes savings along to the end user
• HPEV’s patented heat pipe arrays provide a unique solution, the best cooling available at the lowest
cost. The technology is unrivaled by air cooling, liquid cooling, and heat exchangers
cost. The technology is unrivaled by air cooling, liquid cooling, and heat exchangers
• The technology can be added to almost any electric motor or generator, or motor driven
pump
pump
• Allows motors to run cooler, have longer operating lifespan, and have lower maintenance costs
March 2014
10
ESSCO Testing - “It’s a Real Game Changer”
ESSCO Pumps and Controls, an industry leader of custom pump solutions since 1955, completed its
final round of testing during November 2013 with stellar results
final round of testing during November 2013 with stellar results
John Ivins, ESSCO President:
• “Honestly, I’m amazed with the results! This is a significant innovation in the pump industry and the biggest
improvement in pumps in more than 50 years.”
improvement in pumps in more than 50 years.”
• “…with HPEV’s technology, we now have a solution for a huge industry problem, solving one of its Achilles’ heels. By
removing heat in this way, we dramatically reduce maintenance costs and time loss while improving pump output and
flow as well. It’s a real game changer.”
removing heat in this way, we dramatically reduce maintenance costs and time loss while improving pump output and
flow as well. It’s a real game changer.”
• Testing Measured the heat tolerance of a Grundfos/Yeomans Chicago motor frame
with Nidec wound stator/rotor (Active Material) inside on a dry-pit submersible
pump
with Nidec wound stator/rotor (Active Material) inside on a dry-pit submersible
pump
○ Current dry-pit submersible pumps are cooled by the effluent (what is being pumped) and
they clog regularly resulting in having to be taken out of service often with extremely
high maintenance costs.
they clog regularly resulting in having to be taken out of service often with extremely
high maintenance costs.
○ Current dry-pit pump motors are rated to run out of water for 15 minutes before heat
causes system shutdown.
causes system shutdown.
○ HPEV’s technology was integrated directly into the Nidec motor and the pump no longer
needs to be cooled by the effluent - no more clogging or maintenance
needs to be cooled by the effluent - no more clogging or maintenance
• Results confirmed an increase of more than 200% horsepower output, and
the pump ran for more than six hours of continuous operation (out of water /
not submersed) at or above full power without reaching critical temperatures
the pump ran for more than six hours of continuous operation (out of water /
not submersed) at or above full power without reaching critical temperatures
March 2014
11
Illustrative Cost Savings Example
Lower manufacturing costs and higher horsepower output favorably move both the
revenue and cost levers for motor manufacturers (HPEV’s customers)
revenue and cost levers for motor manufacturers (HPEV’s customers)
Before: Large
hood on top of the
motor is a heat
exchanger
hood on top of the
motor is a heat
exchanger
After: HPEV’s
technology
eliminates the
need for the heat
exchanger; lower
cost and smaller
footprint
technology
eliminates the
need for the heat
exchanger; lower
cost and smaller
footprint
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Air Cooled Motor
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HPEV Improved Motor
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Improvement
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Output (Horsepower)
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1,000hp
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1,400hp
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40%
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Retail Price
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$100,000
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$165,000
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65%
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COGS
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$50,000
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$35,000
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30%
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Gross Profit
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$50,000
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$130,000
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160%
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Electric Motor - Customer Benefits Model
March 2014
12
Incumbent Cooling Technology
Motor and Generator Cooling Options: HPEV wins in EVERY category and reduces
manufacturing costs by more than 25%
manufacturing costs by more than 25%
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Fan Cooled
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Liquid Cooled
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Heat Exchanger
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HPEV
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Heat Transfer
(W/m2K)(1) |
1x
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1x
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4x
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8-9x
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Required Accessories
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Blower/Fan and
Piping |
Pump and Piping
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Pump, Radiator, Fan,
Blower, and Piping |
None
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Construction
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Complex
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Medium
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Complex
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Simple
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Cost
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Low
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Medium-High
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High
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Very
Inexpensive |
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Reliability
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Low (dust particles
and filters required) |
Medium
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Low (fouling)
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High
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(1) Watts per squared meter kelvin
March 2014
13
Mobile Generation
Mobile Generation (MG) systems transform any Class 2-8 truck into a mobile generator
• Patent-pending gearing system uses the truck’s engine, regardless of type
(natural gas, diesel, gas, fuel cell, etc.), to power an on-board generator
that delivers up to 400kw of electric power
(natural gas, diesel, gas, fuel cell, etc.), to power an on-board generator
that delivers up to 400kw of electric power
• Eliminates the need for a tow-behind generator for a work site, saving
a differential of 1/5th the weight and half the cost versus the tow-
behind alternative
a differential of 1/5th the weight and half the cost versus the tow-
behind alternative
• Used to power any electric equipment including common devices such as
compressors, welders, and even bucket truck arms; also serves as an
emergency power backup and can be plugged right into the Grid
compressors, welders, and even bucket truck arms; also serves as an
emergency power backup and can be plugged right into the Grid
• Adaptable to any type of vehicle/engine and does not affect truck
warranties
warranties
• The secret to making all of this work: HPEV’s patent-pending gearing
system and thermal dispersion technology that provides more power
from a smaller unit and allows it to draw the power from the truck
system and thermal dispersion technology that provides more power
from a smaller unit and allows it to draw the power from the truck
• Technology can be retrofitted into existing work trucks or customers can
purchase the Ultimate Work Truck which is a new design/build model
purchase the Ultimate Work Truck which is a new design/build model
• Massive addressable market beginning with utility fleets and other trades
March 2014
14
Estimated Market Size
Addressable markets estimated at over $90 billion, growing 3-5% annually; management
has relationships with nearly all the major industry players from the executive suite to
engineering to manufacturing
has relationships with nearly all the major industry players from the executive suite to
engineering to manufacturing
• The addressable worldwide motor and generator markets are estimated to be ~$60 billion
Big-8: 80-85%
• We estimate the large industrial pump market in the United States to be ~$30 billion
annually
annually
• HPEV is working with several of the leading pump manufacturers to expeditiously get product to
the market; manufacturers expect swift market adoption
the market; manufacturers expect swift market adoption
○ The “Big-8” control between 80-85% of the market
○ Management has relationships at each of the Big-8
at both the executive and manufacturing levels
at both the executive and manufacturing levels
March 2014
15
Revenue Model
HPEV is an intellectual property and engineering company - not a manufacturer
License Fees
Royalties
• Upfront license fee to use the technology
(1-3 year term)
(1-3 year term)
• Expected motor/generator license fee $1-
10 million depending on factors such as
exclusivity, sales minimums, products
that use the technology and duration
10 million depending on factors such as
exclusivity, sales minimums, products
that use the technology and duration
• Royalties on revenue from sales of
underlying equipment = ~3% of gross
sales
underlying equipment = ~3% of gross
sales
• Royalties from Thermacore on each sale
for the use of HPEV’s IP
for the use of HPEV’s IP
In some cases, HPEV will consider JVs with customers
and share the profit margin with zero cash outlay from
HPEV
and share the profit margin with zero cash outlay from
HPEV
Marketing Strategy
Third-Party Validation
• HPEV has third-party validation reports from
multiple industry leading certification firms
multiple industry leading certification firms
• Three of the Big-8 have done internal validation
• Acceleration of Big-8 implementation schedule
• Existing relationships, strategic alliances, trade
journals, and competitive demand
journals, and competitive demand
• In commercialization phase with 2 and design
phase of discussions with 4 of the Big-8
phase of discussions with 4 of the Big-8
• When one is using the technology in the
marketplace, the others will all need the
technology
marketplace, the others will all need the
technology
March 2014
16
Target Customers
HPEV’s optimal customer is a motor/generator manufacturer producing
units between 1hp and 30,000hp
units between 1hp and 30,000hp
• ESSCO Pumps & Controls
• WI Technologies
• Emerson Corp. (NYSE: EMR)
• Nidec Corp. (NYSE: NJ)
• Flygt (Sub of Xylem - NYSE: XYL)
• WEG Motors (Brazil)
• GE Power Conversion (NYSE: GE)
• Siemens (NYSE: SI)
• Regal Beloit (NYSE: RBC)
• ABB (NYSE: ABB)
• TECO-Westinghouse Motor Company
• Thermacore - Leader in Heat Exchangers
• Fabricate HPEV technology and sell
directly to the OEM
directly to the OEM
• HPEV’s “salesforce” to the 200+
motor/generator OEMs that are not
part of the “Big-8”
motor/generator OEMs that are not
part of the “Big-8”
March 2014
17
Management
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Tim Hassett
CEO, Chairman & Co-
Founder |
30+ years experience managing and growing mid-sized manufacturing firms: GE, WaveCrest, Hawk Motors,
Rockwell Automation •Turned around two divisions for Jack Welch at GE
•WaveCrest from $0 to $30M in revenues in 18 months (with Mark)
•Lemo from $32 to $75M in revenue and grew net income 22x in 4 years (with Mark)
•Mars Rover drive train co-designer
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Mark Hodowanec
Co-Founder
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20+ years of engineering & operations expertise: more than 30 publications & numerous patents
•Led new product innovation at Reliance Electric
•Engineering Manager at Siemens Energy and Automation
•Led Emerson to API approval - after Emerson’s efforts had failed for 11 years
•Mars Rover drive train co-designer
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Ted Banzhaf
President
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20+ years experience in growing public companies in all facets of finance, growth strategies, and management
• Expertise in maximization of shareholder value and maturing small companies into larger organizations
• SpatiaLight Technologies (NASDAQ:HDTV), CE Unterburg Towbin, Raymond James
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Quentin Ponder
Vice Chairman
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50+ years experience in management: Baldor Electric Motors, Franklin Electric Motors, GE
• Noted in the book “World Class Manufacturing: The Next Decade” as one of the 5 best executives for
manufacturing improvement pathways in the modern industrial era • Coined the term “Flex Flow Manufacturing” based on his revolutionary manufacturing management
techniques |
Experienced management team with a history of bringing technology to market
March 2014
18
Select Recent News
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2/20/2014: “Energy Efficiency Innovator HPEV, Inc. Reveals Its Burgeoning Patent Portfolio”
•Announced it has received five U.S. utility patents and has more than 20 global PCT patents either pending or in the application process
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2/20/2014: “Energy Efficiency Innovator HPEV, Inc. Brings Co-Founder Mark Hodowanec on as Chief Technology Officer”
•A significant milestone for the Company as Mark will play a key role in driving customer relationships, shaping technology strategy, and further
developing the Company’s patent portfolio •Mark is an industry veteran having previously served as head of engineering at Curtiss-Wright, Director of Operations at WaveCrest
Laboratories, Engineering Manager at Siemens Energy and Automation, and led new product innovation at Reliance Electric |
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1/16/2014: “HPEV Announces New Strategic Advisory Board Led by Recently Retired Emerson Electric Heavyweight”
•Dick Schul is a 43 year motor/generator veteran and industry insider who recently retired from Emerson Electric as Group Vice President of
Emerson Climate Technologies •Dick will provide valuable perspective and recommendations in the areas of product guidance, customer development, and sales and territory
expansion |
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12/17/2013: “Energy Efficiency Innovator HPEV, Inc. Shines in Critical Commercialization Test”
•Mohler Technology, Inc. completed tests for a generator for a yet to be named customer in which power density increased between 25-35%
while all industry certification standards were met |
|
11/25/2013: “Energy Efficiency Innovator HPEV, Inc. Exceeds Expectations in Third-Party Commercialization Tests”
•Announced ESSCO Pumps & Controls completed its final round of commercialization tests for a revolutionary line of dry-pit submersible
pumps for the water and wastewater industry •Current standard is for pumps to run out of water (not submersed) for up to 15 minutes without reaching critical temperatures requiring a
shutdown; the HPEV unit ran continuously for over 2 hours without reaching critical temperatures |
March 2014
19
Investment Considerations
• Patented, disruptive technology is being
commercialized NOW by several of the
Big-8
commercialized NOW by several of the
Big-8
• The immediate addressable market is
approximately $90 billion; a 3% royalty is
an extraordinary earnings opportunity
approximately $90 billion; a 3% royalty is
an extraordinary earnings opportunity
• Improves power output by ~25%, reduces
manufacturing costs by ~25%, and helps
manufacturers meet increasingly stringent
environmental and efficiency mandates
manufacturing costs by ~25%, and helps
manufacturers meet increasingly stringent
environmental and efficiency mandates
• Management team is experienced with
bringing technologies to market and has
extensive relationships with industry
leaders
bringing technologies to market and has
extensive relationships with industry
leaders
• Licensing/royalty revenue model to
provide significant operating leverage
provide significant operating leverage
March 2014
20
Contact Information
OTCQB: WARM
Thank you for your interest
Ted Banzhaf
President
415-971-4873
415-971-4873
tbanzhaf@hpevinc.com
March 2014