Apparent Wind Tapping Wind Power Worldwide Portland, OR

1. Apparent Wind Tapping Wind Power WorldwidePortland, OR Scott Caldwell Michael Alpert Andrew Carlstrom Christopher Wade

2. Management Team • Scott Caldwell – CEO • BS – Geography/GIS; MBA Portland State Univ.; 10 yrs experience project management and retail equipment sales • Mike Alpert - CFO • 5 years experience finance, project management, wind industry; BA Texas A&M Univ; MBA Portland State Univ • Andrew Carlstrom – COO • MBA Portland State University; BS in Botany; 10 yrs policy experience • Christopher Wade – CTO • _BS – Chem Engineering; 10 years project mgmt; 2 yrs ops mgmt; 5 yrs maintenance mgmt Board of Advisors • Dr. James Hunt, PhD in Applied Chemistry; 20 years exp magnet industry • Dr. Julia Adams, PhD in Aerospace Engineering • Robert Davidson, CPA; 20 years exp Tax Accounting; Tax incentive consultant • John Davros, PhD, Wind Industry Consultant • Dr. John Fitzgerald, Phd in Applied Chemistry – Magnet consultant

3. Apparent Wind - At a glance… • Wecapture turbulent, low speed wind with high efficiency… • Utilizing a unique, near-frictionless proprietary technology… • In order to meet the energy needs of our growing and under-served flat-roofed customer base

4. What is going on here?? fact: Rising energy costs are increasingly taking a bite out of profits… …while some areas lack sufficient clean fuels to make clean power generation economically feasible. Thankfully, businesses are waking up to the tax advantages and public relations benefits of using clean energy… …which puts Apparent Wind in the perfect position to help companies clean and green their image while saving money.

5. The opportunity… • Portland, Ore.: 12,500 acres of flat roof today* • 1 acre = 43,560 sq ft • The Apparent Wind 1.8 needs ~300 sq feet • Approximately 145 units per acre = 1.8 million units in Portland • At $15,000 per unit, this market is worth about $27 BILLION • What if we could get our units on ½ of 1% of this acreage? That would be 9,000 units for revenues of $135,000,000! *Ecoroof Workshop: Environmental Services, City of Portland www.portlandonline.com/BES/index.cfm?c=48723&a=201579

6. Technology FRICTION FRICTION FRICTION • Status Quo Mechanical bearings = friction • Coeficient of friction ~__% • Total efficiency loss ~__% • Apparent Wind bearings = near zero friction • Coeficient of friction ~___% • Leads to no efficiency loss FRICTION FRICTION NEAR ZERO FRICTION

7. Solution • The Apparent Wind AW 30 quietly and efficiently captures wind that is: • Urban & turbulent • As slow as 2mph • Shifting and unsteady • The AW 30 is intended for use on flat-roofed • Hospitals • Universities • Factories • Warehouses • The AW 30 creates value for the owner by • Reducing energy bills • Being a mechanism that qualifies for tax incentives • And improves public image

8. Intellectual Property • Proprietary technology: passive magnetic bearing, patented complete system • Invented by Dr. James Hunt PhD, in cooperation with CalTech • Patented rotor blade manufacturing process • Developed by Scott Caldwell, Apparent Wind CEO, in conjunction with Portland State University School of Engineering

9. Competitive Advantage • The Apparent Wind AW 30 will compete on: • Cutting edge style • High urban performance where wind is disturbed and turbulent • Areas with low average wind speed

10. Go to Market Strategy: Geographic Targets Apparent Wind technology opens new geographic markets, and increases power production potential in existing markets Target Market: Areas with weaker solar profile • Portland • Chicago Target Market: Areas with wind potential > solar potential • San Francisco

11. Go to Market Strategy: Flat Roof Targets • Public Buildings • New administration has strong interest in public building infrastructure • Schools • Libraries • Municipal buildings • Existing commercial buildings • Owner occupied • New LEED certified buildings

12. Product Attributes in Go to Market Strategy Low wind speed lowers tower height Lower tower height creates lower zoning barriers in urban areas • Important for new construction • Important for historically sensitive buildings Apparent Wind units are fully compatible with other sustainability goals, notably eco-roofs, where PV panels limit plant growth

13. Existing Apparent Wind Key Relationships • Portland State University (testing site) • City of San Francisco (testing, working to develop small wind zoning ordinance) • City of Portland (testing site agreement completed) • City of Chicago (testing site agreement completed) • Gerding Edlen (green building prototype testing planned) • Toyota (testing agreement in progress) • IKEA North America (working with IKEA on site lease agreement changes to allow testing/implementation on non-IKEA owned buildings) • Daimler Bavaria GMGH (testing agreement in progress)

14. Distribution Strategy • Direct sales of units to flat-roof targets • Installation and service by network of Apparent Wind Certified Contractors • Contractor long-term incentive: percentage share of service contracts and extended warrantees (additional Apparent Wind revenue stream)

15. Manufacturing facility - Portland, Oregon • Manufacturing - Portland, Oregon • Leased space in attractive market • BETC tax credits as renewable energy manufacturer • Human capital advantages with regional renewable energy economic cluster

16. Pricing and Costs • Competitively Priced: $15,000 • Healthy Margins: $11,500 - 12,000 installed manufacturing cost • Partnerships: Generators Inverters • Tax-Incentive Advising to reduce customer cost • Additional revenues for extended warranties & service

17. Financial Projections • Profitability by 2012 • BETC opportunity to offset facility costs • Anticipated acquisition opportunities by 2013-14

18. Use of Proceeds • 2007 • Initial: • $400K • Mgmt Team • Investment • Prototype • Pilot Program • Patent filing • 2009 • Round 1: • $ 3.2 million • $1.3 million • Supplier Purchase • Agreements • $150K mfg setup • $450K R&D • $1.3 million headcount, • mfg leases, etc. • 2011 • Round 2: • $4.2 million • $2 million • Supplier Purchase • Agreements • $400K add’l mfg tooling • $1.1 million headcount, • mfg leases, etc.

19. Apparent Wind: Primed for Growth Saving Energy by Fighting Friction: Here’s the Rub “Resistance alone may burn as much as one-third of the world’s power” -Business Week, November 5 2007 • The AW 30 captures low speed, turbulent, urban winds by using our proprietary magnetic bearing technology • Our customers will save on their energy bills while creating better public perception • We will continue to innovate and bring our pipeline of solutions to market

20. Questions?

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25. Go to Market Strategy Pilot Program - Successfully installed single unit Negotiating sale of first 20 units for retrofitted installation in 2009 Customer Pipeline Gerding Edlen - 30 units sold for ‘09-10 future development “Apparent Wind has shown that we can cost-effectively capture the choppy, inconsistent winds at the top of some of our current and planned buildings. We are excited about the doors this will open for us as developers and as stewards of the natural landscape.” -Mark Edlen, Managing Principle

26. SWOT Overview Strengths Apparent Wind’s unique technology and design profile open new markets Weaknesses Scaled small wind in urban environments relatively untested Opportunities Excellent timing with renewed public leadership and commitment to Infrastructure and renewable power initiatives Threats Global financial crisis

27. Why not pursue PPA's, with customers covering the cost of turbines? • Better short and medium-term use of capital: growth and recoverable costs (product sales) • Modular installation design allows for incremental unit purchases with limited setup costs • Improved tax incentives for customer purchases