Stratean, Inc. Investor Presentation September 2016 We own the - - PowerPoint PPT Presentation

Stratean, Inc.

Investor Presentation September 2016

We own the technology that converts garbage into fuel – turning a global problem into a renewable solution

Safe Harbor Statement

OTC: SRTN 2 Statements in this presentation relating to plans, strategies, testing and operational performance, projections

• f results of specific activities and other statements that are not descriptions of historical facts may be

forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. This release contains "forward-looking statements" that include information relating to future events and future financial and operating performance. The words "may," "would," "will," "expect," "estimate," "can," "believe," "potential" and similar expressions and variations thereof are intended to identify forward-looking statements. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which that performance or those results will be achieved. Forward-looking statements are based on information available at the time they are made and/or management's good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause these differences include, but are not limited to: fluctuations in demand for the Company's products, the introduction of new products, the Company's ability to maintain customer and strategic business relationships, the impact of competitive products and pricing, growth in targeted markets, the adequacy of the Company's liquidity and financial strength to support its growth, and other information that may be detailed from time-to-time in the Company's filings with the United States Securities and Exchange Commission (the "SEC"). For a more detailed description of the risk factors and uncertainties affecting the Company, please refer to the Company's recent SEC filings, which are available at http://www.sec.gov. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Investor Highlights

OTC: SRTN 3

On a path to achieve revenue and free cash flow generation

Stratean creates renewable energy through patented gasification technology that addresses growing climate change and waste management problems

• Growing and urgent worldwide need for environmentally-friendly and

economically-viable waste conversion and alternative fuel production

• Owner of valuable patents, licenses and technologies that are capable of

producing large volumes of clean, renewable, non-global warming energy from any carbon compound into synthetic gas

• State-of-the art, modular Stratified Downdraft Gasifier is based on

proprietary technology that provides a competitive edge

• Modular product design requires significantly lower upfront customer

investment, enables clean gas production to eliminate the need for costly hot gas clean-up and is modular to reduce downtime during maintenance

• Recent acquisition of CleanSpark positions Stratean at the forefront of the

U.S. microgrid market which is projected to increase 300% from $225M in 2016 to $1B in 2020

• Targeting power companies, municipalities and waste and recycling

companies; in advanced stage discussions with multiple potential customers

• Diverse, highly-trained and experienced management team with a wealth of

knowledge and experience in the technical and business world

Market Overview

88.1 104.4 121.1 127.8 151.6 166.3 208.3 217.3 243.5 253.7 254.1 2.7 3.0 3.3 3.3 3.7 3.8 4.6 4.5 4.7 4.7 4.4 1960 1970 1980 1990 2000 2013 Total MSW Generation Per Capita Generation

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Global

• pportunity to

divert waste from landfills and utilize a valuable resource U.S. Municipal Solid Waste (MSW) Generation

Handling and disposal of MSW is a growing concern as the volume of waste continues to increase

• Landfills are the most popular means of MSW disposal, but are not a viable, long-

term solution due to environmental impacts

• Increasing levels of waste driven by urbanization driving strong demand for

renewable energy resources that reduce the carbon footprint

Source: Center of Sustainable Systems, University of Michigan

(# in millions of tons) +68% since 1980

Proprietary, Patented Technology

OTC: SRTN 5

Stratean’s technologies produce GREEN POWER

Inputs Outputs

MSW Coal Sewage Sludge Synthesis Gas

Stratified Downdraft Gasifier

Stratean’s technologies and processes are capable of producing large volumes

• f clean, renewable energy from a carbon compound

RESULT:

• Green power with water and air emissions that are environmentally safe
• For each ton of MSW and / or coal, ~1 Megawatt Hour (MWH) of electricity or

100 gallons of useable fuel is produced Stratean’s technology avoids the root cause of failure of prior technologies by eliminating the need for costly & difficult hot gas clean-up

Products / Production Processes

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• Simplicity is
• ur edge
• Fewer

moving parts

• Durable and

efficient patented process

Products / Production Processes

Availability

Complexity Scalability / Capability Efficiency Clean Process Gas Cost

Stratean Gasifier Pilot scale

• nly

Low Low to high volume capability; modular design 95%+ efficiency* NO GAS CLEAN-UP

Gasifier -Oxygen- blown auto-thermal bubbling fluidized bed design YES Higher Smaller volumes required; More scalable and applicable for large installations ~80% Requires gas clean-up $70.6M Gasifier - Allo- thermal circulating fluidized bed design YES Higher Smaller volumes required; More scalable and applicable for large installations 70%-75% Requires gas clean-up $59.7M Tar Reformer – Allo- thermal bubbling fluidized bed design YES Higher Smaller volumes required; More scalable and applicable for large installations 80.9% Requires gas clean-up $70.7M OTC: SRTN 7

Stratean’s technologies provide a clear advantage to conventional alternatives

STRATEAN Gasification System was compared to three gasification technologies

* Based on third-party test (http://www.stratean.com/s/Stratean-Energy-Gasifier-Evaluation-Report.pdf)

CleanSpark Acquisition

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Expands capabilities in rapidly growing renewable energy sector

Transaction Highlights

• Announced in July 2016
• All equity transaction valued at ~$36M
• CleanSpark existing holders entitled to 6M SRTN common shares + 4.5M

warrants with a 5 year expiration at a $1.50 strike

• Transfers ownership of operating subsidiaries, patent-pending fractal

grid software technology, contracts, patents, and other assets

• Positions Stratean at forefront of exploding U.S. microgrid market which

is expected to increase ~300% from $225M in 2016 to ~$1B in 2020

CleanSpark Profile

• Invested ~$8M to develop and bring to market innovative Mpulse

software technology which manages energy consumption and production

• Generated >$14M in revenue since inception in 2013
• ~$2.6M in existing, executed long-term agreements with a military base,

a golf course, and other campuses to deploy and maintain solar microgrids

• Growing pipeline of opportunities

Synergies

• Augments CleanSpark’s energy management technology with Stratean's

gasifier which can provide a baseload energy source

• Enabling customers to gain further independence from the energy grid

More than Power Combining gasification technology with advanced energy software technology to enable end-to-end renewable, reliable energy management

CleanSpark Overview

 Enables 100% clean microgrid solutions with 100% reliability, at or below utility rates  Technology agnostic approach working with equipment vendors, service providers, and end users  Completed several turnkey microgrid installations

 1.1MW microgrid for the Department of Defense at Camp Pendleton in operation since Q1 2014 as well as in the commercial market.  Total of 7MW of distributed generation and microgrids completed in 2015 and in operation

 Developed microgrid ecosystem through partnerships with U.S. Military, Webcor Builders, Sungevity, Lance Capital, Renova Capital & Energy Management, OZZ Clean Energy, and various energy storage and technology vendors

OTC: SRTN 9

Most advanced tool for behind- the-meter microgrid and DERs market

Developed a proprietary microgrid energy operating platform capable of managing complex power systems from the kW to multi-MW range in real-time

CleanSpark Platform

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Integrated microgrid software and control platform for plug-n-play microgrids

MICROGRIDS 101

CleanSpark’s Platform

• Optimizes energy

consumption

• Integrates and

autonomously controls advanced energy storage

• Provides true energy

and cyber security

• Enables 100%

renewable microgrid solutions Most advanced tool for behind- the-meter microgrid and DERs market

Microgrids are localized power system comprised of distributed generation assets, energy storage devices and smart distribution technologies that can operate as a single, autonomous grid either in parallel to or “islanded” from the existing utility power grid.

Cost Savings Security

Renewables

Storage

Optimizes energy consumption through efficiency and user interaction Integrates and autonomously controls advanced energy storage Provides true energy and cyber security Enables 100% renewable microgrid solutions

Islandable

Most advanced tool for behind-the-meter microgrid and DERs market

Grid Connected

CleanSpark Solution: Flex Power System

Integrated microgrid software and control platform for plug-n-play microgrids

OTC: SRTN 11

More than Power

CleanSpark Technology

OTC: SRTN 12

More than Power

CleanSpark was previously active in the complete value chain with capabilities in all aspects, but required focus on the primary differentiating factors…

Core Focus

A clear focus on core differentiators and simplicity of intelligence implementation

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More than Power CleanSpark Focusing on Core Differentiators

• DNA-driven engineering services modeling and optimization engine for design guidance
• CleanSpark microgrid design Independent Engineering Review ensures proper 3rd party designs

meet CleanSpark requirements for implementation, paid process to submit

• Software deployment though plug and play equipment

Prior Project Life Cycle Involvement of CleanSpark as Lead

Customer Identification Project Development Optimization, Design, & Engineering Permitting Construction Integration & Software Operation and Maintenance

Vendors, Developers, and EPCs Project Developers CleanSpark Client Appointed Engineer CleanSpark Client Appointed Engineer or EPC Client Appointed EPC

• r Webcor

CleanSpark EPC or Client Designee

Customer Identification Project Development Optimization & Basis of Design Design, & Engineering 3rd Party Independent Review Permitting Construction Integration & Software Operation and Maintenance

Enabling End-to-End Autonomous Power

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U.S. microgrid market is projected to increase ~300%... From $225M in 2016 to ~$1B in 2020 Enabling True Energy Independence

Clean, Renewable Energy Creation Efficient Energy Management

Integrating two technologies to position Stratean at the forefront of the U.S. microgrid market

Roadmap to Full Production

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Taking actions to generate revenue and positive cash flow

Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017

Complete improvements on Gasifier identified during pilot scale testing Complete extended run of Gasifier Publish independent study to validate performance metrics Implement Design improvements identified during the study into the 72 ton / day commercial unit Execute sales orders for 72 ton / day units

Five Year Projections

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Increasing unit sales and revenue

$27.6 $58.4 $87.6 $125.9 $142.9 13 24 36 52 56 2017 2018 2019 2020 2021 ($ in millions)

Revenue

Assumptions

• Domestic application only
• First sale occurs in late Q1 2017
• $3M in investments secured in

early 2017

• Tipping fee of $3.75 per ton of

feedstock processed

• 43 territory sales licenses sold to

dealers over 5 years

• 182 CleanSpark microgrid software

applications sold over 5 years

• 70 MicroGrid design and

engineering contracts over 5 years

• 38 commercial ’Turnkey’ Microgrid

solutions developed.

(on assumed units sold)

Balance Sheet

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Solid balance sheet to support growth $36,685,169 $257,540 $36,942,709 Total Shareholders' Equity Total Liabilities Total Assets

$ in thousands

8/31/16 6/30/16 Cash 478,629 81,854 Total Assets 36,942,709 781,025 Total Loan Debt

• Total Liabilities

257,540 61,662 Total Shareholders’ Equity 36,685,169 719,025

as of August 31, 2016

Management

• S. Matthew Schultz, Chief Executive Officer, has been involved in many capacities with several publicly

traded companies. Most recently, he served as the President and CEO of Amerigo Energy, Inc., creating multiple syndicated offerings of developmental oil production programs, as well as overseeing the

• perations from permitting through production. Since 1999, he has assisted numerous development and

early stage companies to secure financing and experience significant growth. As the President of Wexford Capital Ventures, Inc., he was instrumental in funding companies both domestically and abroad. While serving as the Chairman of Pali Financial Group, Inc., he assisted in market development of dozens of public

• corporations. He was a founding member and the Vice President of the Utah Consumer Lending
• Association. A native of Lander, WY, he studied management and finance at Weber State University.

OTC: SRTN 18

Experienced management team with…

Michael Barrett, Chief Operating Officer, Mr. Barrett is a licensed General Engineering and General Building Contractor with over 25 years’ experience in the construction and development industries. He is also a founding partner and principle of ICON Renewables, LLC. Where he has gained over 10 years of specialized waste-to-energy project development experience. He has worked directly with national and international industry leaders producing thousands of tons of high-value feedstocks annually. Mr. Barrett has served as a professional consultant for several public and private sector firms and provides services such as investigation, discovery and research. Mr. Barrett has provided regulatory management over many large commercial and industrial projects such as Rio-Tinto Kennecott Mine and Facilities, Utah’s Olympic Oval, Salt Lake County Emergency Operations Center, Jail and Sheriff Headquarters, Central Valley Water Reclamation Facility and many other large projects. Zachary K. Bradford, Chief Financial Officer, is a licensed Certified Public Accountant in Nevada and a member of the American Institute of Certified Public Accountants. He has served as the managing partner

• f a public accounting and consulting firm in Henderson, Nevada since June 2013 and has served as a

consultant Bradford holds a B.S. in Accounting and a Masters of Accountancy from Southern Utah University and outsourced CFO for several companies in both the public and private sectors. Mr.. Since March of 2015, Mr. Bradford has also served as a member of the board of directors and Chief Financial Officer of Epic Stores Corp.

Board of Directors

OTC: SRTN 19 Bruce L. Lybbert, Director, a seasoned veteran of the brokerage industry and Wall Street has served on the Board of Directors in several Companies in the public and Private sectors. Mr. Lybbert co-founded Tel America, Inc. in 1982, growing it into a successful communications giant, which became the largest regional long distance carrier in the western United States. Mr. Lybbert holds a B.A. in finance and marketing from Weber State University and pursued post-graduate studies in finance at New York University. Larry McNeill, Director, is an experienced executive with a diverse business background that includes a range of broad business skills gained from his many roles in Real Estate, Finance, Research, Legal, Management, and Business Strategies. Previous roles include Director of Safeway Grocery Stores, Inc's Consumer, Sales, and Store Location research departments where he was responsible for the expansion of Safeway in Europe, Australia and Canada; Director of Market Research for A&P where he was responsible for the Company's expansion into Saudi Arabia and Executive Officer of Smiths Food and Drug Centers for 17 years. Most recently he served as the SVP of Corporate Development overseeing the Research, Real Estate, and Legal

• Departments. Mr. McNeill retired from Smith’s after the Fred Meyer merger was
• completed. He has since served as the CFO of Theater Candy Corp. and Videolocity,

Inc., and co-founded and served as Vice President of the American Polymer

• Corporation. Mr. McNeil holds an MBA from Armstrong University, a BA in Business

Administration, Economics, and Russian language from Minnesota State University, and has completed the course work towards his PhD in Business Management.

Investor Highlights

OTC: SRTN 20

On a path to achieve revenue and free cash flow generation

Stratean creates renewable energy through patented gasification technology that addresses growing climate change and waste management problems

• Growing and urgent worldwide need for environmentally-friendly and

economically-viable waste conversion and alternative fuel production

• Owner of valuable patents, licenses and technologies that are capable of

producing large volumes of clean, renewable, non-global warming energy from any carbon compound into synthetic gas

• State-of-the art, modular Stratified Downdraft Gasifier is based on

proprietary technology that provides a competitive edge

• Modular product design requires significantly lower upfront customer

investment, enables clean gas production to eliminate the need for costly hot gas clean-up and is modular to reduce downtime during maintenance

• Recent acquisition of CleanSpark positions Stratean at the forefront of the

U.S. microgrid market which is projected to increase 300% from $225M in 2016 to $1B in 2020

• Targeting power companies, municipalities and waste and recycling

companies; in advanced stage discussions with multiple potential customers

• Diverse, highly-trained and experienced management team with a wealth of

knowledge and experience in the technical and business world

Contact Information

OTC: SRTN 21

For More Information Company Contact Matt Schultz, CEO and President Stratean, Inc., Bountiful, UT Tel 801.244.4405 | matt@stratean.com www.stratean.com Investor Relations Brett Maas, Managing Partner Hayden IR Tel 646.536.7331 | brett@haydenir.com www.haydenir.com