Energy Industry Support

© 2013 All Rights Reserved. Nerac Inc. | 1 Technology Drive, Tolland, CT 06084

Nerac

Research & Advisory Services

For the Alternative Energy & Storage Industries


Agenda

Introduction to Nerac, Inc.

Nerac Service Offerings

The Nerac Difference

Engaging Nerac


Who Is Nerac?

Global research and advisory firm

for companies developing innovative

products and technologies

COMPANY TYPE: PRIVATELY HELD ESOP

Founded 1966

Employees 65 / National & International

Analysts 40 Ph.D.s, Masters, MBAs, Attorneys

Clients ~1000 Worldwide

Areas of Concentration

Energy

Pharmaceutical

Medical Device

Specialty Chemical

Other


How We Serve Our Clients

Unique provider

of rapid-response research

for smaller, mission- critical

engagements that require

highly experienced

expert advisors.

R&D Process

Business Development

Technical Product &

Service Marketing

Intellectual Property

Management


What We Do Expert Research & Advisory Services

Research and Product Development Process

— Accelerate critical go/no-go decisions

— Expedite regulatory filings and vigilance requirements

Business Development Process

— Identify portfolio and alliance opportunities

Technical Products & Services Marketing Process

— Understand the size and financial potential of market opportunities

Intellectual Property Management Process

— Protect and leverage IP assets through portfolio management


Research & Development Process Accelerate Critical Go/No-Go Decisions

PROCESS STAGE

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OPPORTUNITY

IDENTIFICATION

CONCEPT & FEASIBILITY

EVALUATION PLAN PRODUCT LAUNCH

TECHNICAL &

RESEARCH

AND

DEVELOPMENT

• Technical due diligence

& viability assessment

• Technical literature review

• Regulatory issues review

• Intellectual property review

• Identify research partners

• Match resources

(internal and external)

to needs

• Grant development

and review

• Procurement

• Technical problem

solving

• Conduct research,

collect and evaluate

data

• Monitor new

opportunities

BUSINESS &

MARKETING

• New market identification

• Competitive tracking

• Whitespace analysis

• Technology scouting

• Market assessment

• Determine company synergies (core competencies

and technologies)

• Tax credits and subsidies

• Identify cross-market

applications

• Monitor future growth

opportunities

LEGAL • Clearance research

• Patentability research

• IP valuation • Patent filing support

• Monitor post-patent

filings for infringement

protection

• Monitor licensing

opportunities


Research & Development Process Examples of Recently Completed Projects

Performed state of the art assessment in thermophotovoltaic

(TPV) technology for vehicles

— Nerac identified the research laboratories that were the furthest along in their

development of this nascent technology, and the key improvements needed for

commercial implementation. Most importantly, a competing technology was

identified which has the potential to displace TPVs in the future.

Identified key suppliers for critical elements of client’s new product

— Nerac identified battery chemistries which were most appropriate for the application

and reliable vendors who could supply the client with a custom battery to fit its

unique needs, saving its engineering staff valuable time on a time-critical project.

Regulatory overview regarding individual state requirements for the reduction of

a specific coal-fired power plant pollutant

— Nerac provided the client with a complete map of the various state regulations that

allowed them to focus sales efforts for an emissions reduction product where

utilities were most likely to buy, thus maximizing their sales impact to the bottom

line.


Issue: The CEO of a large manufacturing company asked Nerac to provide an opinion

on the advisability of engaging in a joint venture with a company in the field of

concentrated photovoltaics (CPV). One of the key issues for the client was the

technical feasibility and market outlook for the underlying CPV technology being

given consideration.

Analyst Approach: Based on Nerac’s analysis of the technology and market factors,

the client chose to avoid an engagement in this technology. The technical application

being considered was not sufficiently proven to warrant investment at

the time. Furthermore, the market for this application was unformed and highly

speculative.

Client Benefit: Based in part on Nerac’s advice, the client declined to take part

in this joint venture and avoid a potentially costly failure. The technology being

advocated has not sufficiently matured in the year that has elapsed since the time

of the proposed partnership and no significant market for its use has developed.

Research and Development Process Client Impact Case Study


Business Development Process Identify Portfolio And Alliance Opportunities

PIPELINE & SCREENING DUE DILIGENCE ANALYSES FINAL DEAL

NEGOTIATION

POST-

ACQUISITION

INTEGRATION

BUSINESS

DEVELOPMENT

• Business opportunity vetting

and identification

• Assess patent landscape

• Market and competitive

assessment

• Monitor

- Competition

- Changes in market

or regulatory

environment

OPERATIONS • Support informed investment

decisions with CI

• Analyze technical viability

• Develop tax, subsidy and

regulatory strategy

• Support revised

business

strategies

LEGAL • Provide patent protection

opinion/advice

• Provide patent landscaping

services, early-stage

clearance research, risk

assessment

• Analyze licensing and

acquisition opportunities

• Research negotiation positions

• Monitor patent

activity

• Support revised IP

portfolio

management

strategies

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Business Development Process Examples of Recently Completed Projects

Assessment and review of client’s financial position,

business strategies and customer relationships based on strengths

and weaknesses in the heat recovery market

― Nerac found the client to be in a position in which it has the technical and

financial flexibility and capacity to enter this specific market.

Assess market potential of a fullerene material for batteries and fuel-cells

― Nerac identified a specific battery segment as being the most appropriate for this

technology but recommended avoiding the medical, electronic and automotive

segments.

Identify potential partner for a joint venture to facilitate entry into the

renewable energy market

― Nerac identified a potential partner with experience and flexibility in

manufacturing methods requiring extensive equipment and capital, thereby

serving as a partial barrier to other companies entering the market, and giving

the client significant competitive advantage.


Business Development Process Client Impact Case Study

Issue: Nerac was engaged by a senior business development

executive from a medium-sized energy manufacturing company to investigate

options for entry into the biofuels market through a strategic acquisition. The client

needed a full understanding of the market landscape including major competitors and

their relative positions, size and forecast for the market, market entry points, and

government incentives and regulations.

Analyst Approach: Based on Nerac’s analysis of the biofuels market, Nerac Analysts

determined that the key to a successful acquisition in this market was the geographic

location of the production facility in relation to both the raw material supply and the

customer. Nerac advised that the market was attractive and could generate

significant top line revenue impact for the client.

Client Benefit: Based on Nerac’s recommendations, the client proceeded with a

strategic acquisition in the biofuels market which will be accretive in 2010.


Technical Products Marketing Process Accelerate Critical Go/No-Go Decisions

OPPORTUNITY IDENTIFICATION CONCEPT & FEASIBILITY EVALUATION

MARKETING • Market and competitive assessment • Locate sources of funding

• Identify potential partners

TECHNICAL &

RESEARCH AND

DEVELOPMENT

• New market identification

• Technical due diligence &

viability assessment

• Technical literature review

• IP review of competitor filings

• Identify suppliers and enabling technologies

LEGAL • Identify regulatory opportunities

• Locate government incentives

• Develop environmental compliance strategies

• Prepare filings for conformity and industry standards

bodies

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Technical Products Marketing Process Examples of Recently Completed Projects

Market assessment for a potentially disruptive fuel

for use in fuel cells

― Nerac analysis found that while the novel fuel was promising, the market

potential for it was small and continued investment and development should be

at a measured pace.

Competitive analysis of several Chinese competitors for a multi-

national client in the turbo-machinery market

― Nerac analysts located hard-to-find information about recent activities

of the Chinese companies including power plant installations and upgrades,

thus allowing the client to better understand its competitive situation.

Market assessment for wind turbine blade construction adhesive

— Nerac analysts identified key market attributes and analyzed their importance to

assist the client in deciding whether to enter this market.


Issue: A C-level executive at a biofuels developer engaged

Nerac to help it secure funding from the U.S. Department of Energy.

One of the key elements to obtaining the funding was the comparison

of the financial and technical strength of the client’s production process

compared to that of competitors’ processes.

Analyst Approach: Based on Nerac’s analysis of the competitive landscape

of the biofuel production process, Nerac determined the client’s process

provided substantial technical and economic advantages over the

competition.

Client Benefit: Nerac’s assessment was comprehensive, saving the client

considerable manpower and expense so that they could more effectively

present to the DOE.

Technical Products Marketing Process Client Impact Case Study


OPPORTUNITY &

RISK ASSESSMENT

IP PORTFOLIO

MANAGEMENT

PATENT FILING

AND/ OR LICENSING

NEGOTIATION

IP RIGHTS

ENFORCEMENT

LEGAL • Patent landscaping services by

technical experts

• Early-stage clearance research

to identify competition and risks

• Leverage regulatory issues

• Patentability research by technical experts

• Prepare Petition to Make Special and support

with detailed prior art research

• Filing requirements for participation in USPTO

Pilot Program

• Electronic patent portfolio creation for case and

asset management

• Due diligence support for in-licensing

• Provide objective analysis of out-licensing

opportunities

• Identify enforcement

targets based on products

and technologies

• Provide objective support

for assertion positioning

TECHNICAL &

RESEARCH AND

DEVELOPMENT

• Professional opinion on availability

of patent protection for new ideas

• Inform investment decisions with CI

• Help identify developments with most promise

for patent protection

BUSINESS

DEVELOPMENT • Help identify space for technical

development within the patent

landscape

• Provide CI support for new

market entry

• Identify latent opportunities for IP

commercialization

• Provide objective research in support of

negotiation positions

• Help identify new commercialization partners

• Inform decisions to

assert patents from a

business/revenue

standpoint

MARKETING • Guide marketing efforts with understanding

of commercial scope of IP

Intellectual Property Process Enable Effective IP Portfolio Management

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Intellectual Property Process Examples of Recently Completed Projects

Determine if a competitor's patent for a heat exchanger

could be invalidated.

― Nerac determined that prior art exists which pre-dates this patent

and is appropriate for invalidating several key claims.

Determine the patentability of seven photovoltaic cell manufacturing

tools.

― Identified that several of the designs were appropriate to invest further time and

effort into patenting.

Procure patent protection for converting current combustion engine

technology over to a radically different fuel source and then license

the rights to manufacturers.

— Nothing was identified which would preclude patentability of this technology.

Further, nothing was found to preclude the technical feasibility of using this

technology in existing engines and pursuing commercial applications.


Issue: A Project Manager at a large petroleum company needed to understand the

Intellectual Property relating to the use of supercritical fluids (SCFs) in chemical

processing. The specific technology they wished to patent was of high importance

to the company’s future, and the Project Manager needed confidence that they

completely understood this space before investing significant time and money.

Analyst Approach: Nerac analysts skilled in chemical research advised the client of

the high concentrations of patents as well as several opportunities which existed in the

use of SCFs. The Nerac team also identified several competitor’s whose patenting

strategies were intentionally obscuring their holdings from ready identification. Not

recognizing the tactics and patenting trends could have caused significant problems

for our client as they attempted to expand their own IP holdings in the future.

Client Benefit: A client was able to develop a patenting strategy which would ensure

that their competition would not be able to block further development of this technology.

Through the Nerac analysis, they are now prepared to defend any attempts to

invalidate their patents, also, giving them a strong position as they develop this highly-

critical SCF method.

Intellectual Property Due Diligence Client Impact Case Study


The Nerac Experience

In Just Days

Nerac can move from

scoping client need to

project execution

A Turn-Key Research Operation

Confidential Collaboration

with highly skilled research

staff as an extension

of your team

High Impact Results

tailored to client scope,

timing and budget

Seamless

Partnership.

Rapid

Progress.


The Nerac Difference Rapid Response, Highly-Skilled Expert Advisors

• Seamless teaming with client staff to form a trusted partnership

• Flexible engagements which offer rapid, impactful results

• Custom research services tailored to client scope, timing and budget

• Unique blend of Nerac Analysts’ keen insights and industry experience

• Unwavering integrity and relentless protection of client information

• Nerac researchers, analysts and IP advisors bring four decades experience

serving thousands of energy companies


Engaging Nerac Simple & Flexible Agreements

EXPERT RESEARCH REQUEST SERVICES

Source and synthesize relevant information

from many sources

Administer and manage alerts

Research key resources, including scientific,

technical, medical and patent sources

Contact industry, commercial, academic,

or government facilities

Discuss research or business challenges

and needs

Designed for individuals who prefer to

conduct their own synthesis and analysis

RESEARCH & ADVISORY

SERVICES

Expert analysis of businesses and

technical information to produce

actionable insights

Data-driven evaluation of technical,

business and intellectual property

trends

Designed for individuals who want

expert analysis and opinion in

addition to sourcing and synthesis

SPECIAL PROJECT SERVICES

Scope of work to be defined under a

specific agreement

Designed for large engagements

executed for a fixed price


Next Steps

Define Need

Assign and Introduce Analyst or Team of Analysts

Schedule Scoping Meeting

Distribute Agreement for Review and Sign-off

Project Launch Meeting/Discussion


Detailed Case Study Examples

1. Jatropha Oil Market Opportunities

2. Turbo Expander for Natural Gas Letdown Stations


Case Study Example Jatropha Oil Market Opportunities

A client which utilizes a large number of diesel engines

wanted to explore the use of Jatropha oil in place of diesel fuel.

Their intent was to reduce energy costs and realize a competitive

advantage through increased efficiency. Also, this initiative could also provide

environmental benefits which could translate into positive public relations.

Nerac was engaged to evaluate the various key drivers of this initiative

including:

a. Financial risks and opportunities

b. Competitive landscape

c. Partnership opportunities

d. Agricultural implications

e. Energy balance

f. Governmental funding opportunities

http://upload.wikimedia.org/wikipedia/commons/5/5d/Belize3.jpg


Case Study Example (continued)

Jatropha Oil Market Opportunities

Approach: Nerac’s analysis of the various market aspects

of Jatropha including agricultural and bioengineering, intellectual property,

recent research advancements as well as an evaluation of key business

and financial drivers related to the agricultural and refining requirements

of Jatropha resulted in four strategic options for the client, with several

implementation steps for each option.

Result: ― Based on Nerac’s research and analysis,

the Client decided to proceed in developing

this energy source.

― Nerac provided a forecasted ROI and timeline

for development, including specific opportunities

and potential hurdles.

― Nerac also provided agricultural recommendations

and identified potential partners.

Biofuels and Cost

Per Barrel of Biodiesel


Case Study Example Turbo Expander for Natural Gas Letdown Stations

Client engaged Nerac for an independent, third party

assessment of their turbo expander in place of throttle valves

at letdown stations for natural gas distribution systems. The

overall intent was to understand the future opportunities in a

market which transcends traditional and alternative energy.

Nerac was engaged to evaluate the following:

a. Identify the international market sizes and trends

b. Estimate payback periods

c. Develop customer lists

d. Determine if any Intellectual property would impede the

commercialization of this product or potential partners

e. Access the client's solution against competitive products to

determine strengths and weaknesses

f. Analysis performed by Nerac demonstrated the viability of the

Clients product against current competition and market trends.


Approach: The client’s design was evaluated

first for technical suitability in a gas letdown

station by developing the appropriate energy

analysis model. Subsequent analysis would

then determine where this design fit into the

current market and which competitors were

already producing products there.

Key Results

• Nerac discovered that the energy model of the

turbo expander revealed that it was undersized

for use in the client’s originally intended

application of a letdown station.

• Nerac recommended against entering this market

,and instead to look for alternative opportunities

which were more suitable for this design.

• At the client’s request, Nerac moved forward with

identifying an appropriate market for their design.

• The final results, reviewed with the client,

were used to establish the appropriate product/

marketing roadmap.

• This new direction saved the client significant

capital investment by avoiding entry into the

wrong market.

Case Study Example (continued)

Turbo Expander for Natural Gas Letdown Stations

Pressure – Enthalpy Diagram Illustrating

the Work Capability of the Turbo Expander


Case Study Example Nerac Analyst Bios

J.T. Kraska

B.S., Chemical Engineering,

Manhattan College

Emma Palmacci, Ph.D.

Ph.D., Organic Chemistry,

Massachusetts Institute of Technology

B.S, Chemistry with a concentration in Medicinal

Chemistry, Worcester Polytechnic Institute

Kevin Closson

M.S., Mechanical Engineering,

University of Maryland

M.B.A., University of Baltimore

B.S., Mechanical Engineering,

Pennsylvania State University

Alan Kendrick

J.D.,University of San Francisco

B.S. Magna Cum Laude, Aerospace

Engineering, San Jose State University

Steven Sparkowich

Graduate Certificate, Welding Engineering,

Ohio State University

B.S., Metallurgical & Materials Engineering,

Colorado School of Mines

Documents

Energy Industry Support