Adventuri Business Opportunity

© 2016. Adventuri, LLC. Unpublished Work.

Adventuri, LLC

2

U.S. Domestic Fuel Consumption• U.S. domestic fuel consumption is ~200 billion gallons per year

– Over 90% of the freight tonnage in the U.S. is managed by diesel fuel powerplants and isn’t going away soon• The annual fuel consumption for a diesel semi-truck is ~$30,000 per year compared to ~$1,500 for the gasoline vehicle suggesting much higher margins per product sold

for diesel products vs. gasoline.• The number of fuel-savings product designs that need to be produced to service the diesel freight market is relatively small and doesn’t require some level of constant

redesign per year to address new makes/models of vehicles• At a conservative 10% relative improvement in fuel economy and $2.5/gallon, the diesel fuel savings market corresponds to ~$7.5 billion annual total market of which at

least 50% is readily addressable.

• Markets in China, Europe, Japan, Canada, Mexico, Korea, Brazil readily addressable thru licensing• Adventuri, LLC is pursuing this diesel market opportunity with its Exhaust Venturi Product

Cars & Motorcycles

39%

Truck/SUVs31%

Semi-Trucks

15%

Other15%

U.S. Civil Vehicle Fuel Consumption 2006 U.S. Dept. of Transportation Statistics

0

50

100

150

200

250

1990 1995 2000 2005 2010Fuel

Con

sum

ption

(bill

ions

of g

allo

ns)

Year

Total U.S. Gasoline/Diesel Consumption

Adventuri, LLC

3

The Venturi Exhaust Product• We have developed an aftermarket exhaust system that improves automotive fuel

economy by >15% (1 U.S. Patent/1 U.S. Patent Pending/8 Patents Pending Overseas)– Previously CARB certified in California (executive order received)– Has been demonstrated in road trials on multiple vehicles– Easily installed on new or used vehicles or any internal combustion engine– Low Cost – pays for itself in <1 year – Derived from DARPA and NASA technology development awards (2008-2011) for highly fuel

efficient extreme altitude unmanned aerial vehicle engines• We are pivoting into the very stable diesel market until gasoline prices recover

Adventuri, LLC

4

Exhaust Suction on Internal Combustion Engines

• We have mapped internal combustion (IC) engines with applied suction to determine optimal performance parameters using engine dynamometer, simulated vacuum system, and instrumentation

0%

10%

20%

30%

40%

50%

60%

-4-3-2-10

Rel F

uel E

cono

my

Impr

vom

ent

Exhaust Vacuum Pressure (psig)

Engine Fuel Economy under varying Load vs. Exhaust Suction Pressure

@2700 rpm

25 ft lb

31 ft lb

43 ft lb

• The Adventuri product enhances engine fuel economy and emissions reduction utilizing strong exhaust suction

Adventuri, LLC

5

Venturi Exhaust System Overview

• The Adventuri product generates strong engine exhaust suction using a venturi that ingests air while a vehicle moves– The slower the vehicle speed, the larger the inlet area to accelerate air

• Applicable to moving powerplants (overland freight trucks, trains, marine powerplants, fleet vehicles, consumer automobiles)

Hydraulic Jump: As Venturi cold gas expands and slows, static pressure recovery relative to hot gas stream static pressure causes vigorous turbulent mixing between

2 fluid streams to balance fluid stream static pressures

Mixing Section“Choked” Sonic Velocity Venturi Gap:

From design speed up to >80mph, Venturi mass flow rate is ~ constant

Mixer: Forces hot exhaust pipe flow into annular flow to promote uniform mixing with the cold venturi gases in the hydraulic jump

Well-mixed 2 stream gas momentum to

recover to local atmospheric pressure

preserving high suction Venturi effect upstream at exhaust

pipe outlet

Low Mach Hot Exhaust Gases

Adventuri, LLC

6

Customer Channel Partner

• Adventuri has developed a strategic relationship with GoTek Energy® to be able to utilize their existing customer network and supply chain partners– Sales estimate based on 2 major beverage manufacturer fleets and one OEM

truck manufacturer at ramp-up penetrations. – 2nd YR. HD truck sales estimated at 3,800 units in the U.S.– GoTek Energy® receives sales commission incentive

• Customer Validation– ~2 week lead time from product ready to pre-contract customer validation – 6-8 weeks of accelerated road testing by fleet /OEM customer validation

• Contract Sales– At a wholesale price of $2,390 /unit, annual 2nd year revenue is $9.1M – With 1 MPG improvement at a $3,990 installed end-customer sales price;

customer ROI is 10 months. (see note)NOTE: Average HD Truck mileage is 118.8K mi/yr, @7MPG @ $2.40/gal. @ 8MPG @ $2.40/gal, fuel cost savings are $5,090 /yr.

Adventuri, LLC

7

Product Development Strategy - Stage 1

• Prior to designing actual venturi exhaust suction, need to measure suction levels on actual vehicle powerplant/system:

– Establish Venturi Design Requirements• Best engine fuel economy under 70%-80% operating conditions (low hanging fruit in venturi

design). • Can worry about more sophisticated optimization for last 20%-30% downstream improvements if

return-on-investment justifies additional upgrades– Evaluate emissions improvements– Ensure no accelerated engine wear

• For overland freight vehicle applications we’re developing a vehicle dynamometer testbed to support such suction mapping measurements

Adventuri, LLC

8

Product Development Strategy – Stage 2

• Actual Freight Vehicle Powerplant Testing with Simulated Suction

• Product Development– Once Powerplant Suction mapping is done, we can quickly software design

the optimal venturi product for the application using advanced computational fluid (CFD) software tools

• Product Verification– Our dynamometer test facility for overland freight vehicles is being

developed to also simulate vehicle speeds with blowers that generate airflow into the venturi inlets

– These test facilities allow Adventuri to verify product performance prior to actual product deployment

• Customer Product Validation– 6-8 weeks of road trial testing on representative customer fleet vehicle by

customer • Typically fleet operators will run 3 shifts per day of 8 hour driving operations to accelerate

product validations under relevant driving conditions for their operations

Adventuri, LLC

9

Production & Sales

• Adventuri will own all IP and exhaust venturi designs in the U.S. with options of licensing (particularly for foreign markets)

• Core elements of the exhaust venturi will be manufactured in-house or thru a tightly held, redundant network of primary contract manufacturers

• Accessories and the rest of the venturi kit will be produced by a larger network of secondary contract manufacturers/product distributors to help ensure competitive cost control

• Final kit assembly and packaging will be conducted in-house or thru or at least one of the primary contract manufacturers

• Adventuri will manage supply chain logistics with emphasis on on-demand production/delivery to help minimize inventory

• Sales will be conducted through existing supply chain partners under sales commissions agreements until product is well established

Adventuri, LLC

10

Summary

• Adventuri, LLC is developing business opportunities for its disruptive Exhaust Venturi product. This product is designed for improving fuel efficiency as an aftermarket upgrade for internal combustion engine applications

• Adventuri is currently focused on diesel freight applications as its target entry market – Over 90% of the country’s and world’s freight moves through diesel fuel and

isn’t going away anytime soon. Ongoing competition amongst fleet operators to continually strive to reduce operations costs ensures stable market regardless of fuel price

– Much higher per product profit margins compared to small consumer vehicle applications that consume <5% of equivalent fuel in a year

– Less product variants (~6 core designs will service over 50% of the industry) and easier to design/produce (more vehicle volume to work with)