Algae Energy

1. Algae Energy A Renewable, Sustainable and Profitable Business

2. Executive Summary Algae.Tec offers direct exposure to an industry that has been hailed as the potential solution to the world’s growing energy needs. • Algae.Tec is looking to raise A$7.5 million by 15 November 2010. • Funds will be spent on the construction of a demonstration plant following successful pilot plant testing, together with further research and development. • Algae-derived fuels offer a clean and efficient alternative to conventional petroleum hydrocarbons and other bio fuel feedstocks. • The Algae sector in the US has attracted investments from some of the world’s most recognised individuals and foundations including; • Sir Richard Branson, • Bill Gates, • Rockefeller Foundation.

3. Market Drivers • CO2 + Global Warming • Rising Energy Demand • Fossil Fuel Depletion • Oil/Fuel Import Cost • Population Growth • Food/Energy Conflict • Deforestation • Emission/Plastic Pollution Energy & Environmental Challenges Algae Products • Biodiesel • Distillates (e.g., Jet Fuel) • Ethanol • Fertilisers • Edible Algal Oil • Animal/Bird/Fish Feed • Bioplastics • Specialty Co-Products Algae.Tec’s technology and its products represent an opportunity to address today’s key energy & environmental challenges in a way that is commercially attractive.

4. Market Overview There are several companies in the emerging Algae sector that have raised substantial amounts of capital from noteworthy investors. These include: • Petroalgae, based in Florida, USA. Planned production by open pond method. Have an underwritten offer with UBS, Citigroup and Goldman Sachs for $200 million with pricing yet to be determined. Current market cap in excess of US$1 billion. • Synthetic Genomics, based in California, USA. Planned production by open pond method plus genetic engineering research. Exxon Mobil have committed up to $600 million. • Sapphire Energy, based in California, USA. Planned production by open pond method using genetic engineering research. Bill Gates, Rockefeller Foundation and Wellcome Foundation have committed $50 million each. Additional monies of at least $200 million have been raised to date. • Solazyme, based in California, USA. Developing fermentation technology. Hence, the source of energy is carbohydrate feed as opposed to sunlight or other light sources. Four rounds of capital raising completed to date. The latest round attracted $52 million from a group comprising; Unilever, Sir Richard Branson, Chevron Technology Benches and Bunge.

5. Benefits of Microalgae • Algae derived products are the liquid fuels of the future. • Nature’s oldest and most efficient process for converting solar energy and carbon dioxide (“CO2“), via photosynthesis, into renewable and sustainable fuels. • Produces orders of magnitude more oil and hydrocarbons per land mass than any terrestrial crop, and can be cultivated virtually anywhere with use of marginal land or industrialisedareas. • Hydrocarbons derived from algae production can be used to produce renewable biofuels for direct substitution of fossil fuels, reducing dependence on external supply. • Non-competition with traditional food crops for fuel production, providing a long-term sustainable fuel source not derived from food source vegetable oils. • Fuels derived from Algae feedstock is a real solution to the planets growing energy constraints

6. Land Space Requirements • 400 times more productivity than agricultural crops. • 10 times efficiency improvement over competitive open pond systems.

7. Algae-Tec Proprietary Technology Algae. Tec is in a unique position to establish a first mover advantage in this exciting emerging energy sector. • Modular “Photo-Reactor” system with unique and patented engineering design for high productivity and yield performance within a controlled environment. • Direct integration with power plant stackgas CO2 sources for significant reductions in greenhouse emissions and use of waste heat conversion energy. • Primary light energy supply via parabolic solar collection system and indirect light distribution network with control of light intensity and optimal wavelengths. • Innovative process technologies and proprietary know-how for algae harvesting, oil extraction, recovery of products and conversion to downstream products. Technology Features & Advantages • Minimum Water Losses • Wastewater Use Capability • No Atmospheric Contamination • Enhanced Harvesting System • Algae Oil, Biomass and Co-Product Refinement • Modular Construction • Optimum Algae Species • Flexibility in Algae Production • High CO2 Utilization Efficiency • Recovery of Stackgas Emissions • Efficient Mass/Heat Transfer • Efficient Light Dispersion & Control • Optimum Nutrient Supply • High Algae Productivity • Quality Biofuel Products • On-Stream Plant Reliability • Low Conversion Energy • Waste Heat Utilization • Minimum Footprint Requirements • Capital & Operating Cost Savings

8. Algae-Tec Flow Sheet • Light is captured through a filtered sunlight & artificial light system and is relayed to the photo-reactors by fibre optics. Stack gas including CO2 is piped via a heat exchanger directly from the PowerStation. In addition, nutrients and water are added to create the optimum cultivation environment. • Algae is grown in the patented photo-reactors; the process yields continuous output of wet algae. • Wet Algae is separated from water, which is recycled back into the reactors. • Wet Algae is dried as an intermediary step of separation. • Oil and biomass are separated for sale to third parties. 1 2 3 5 4

9. Hypothetical Case Study 300 million tonnes of CO2 are emitted in Australia annually from electrical generation with a potential to feed Algae Tec’s photo bio-reactors. The Liddell and Bayswater coal fired power stations in the NSW Hunter Valley report total direct CO2 emissions of 25.3 million tonnes per annum. • Operations: • Install 5,000 modules at a cost of US$ 70,000 per module inclusive of processing equipment or US$350 million in total. • Modules expected to be in operations for 20+ years with limited maintenance capital required . • Each tonne of dry algae produced captures two tonnes of CO2. • Each module produces ~250 tonnes of Algae per annum or 1,250,000 tonnes in total (2.5 million tonnes of CO2 captured). • Annual output of approximately 625,000 tonnes of Algal oil and 625,000 tonnes of Biomass. • Cashflow: • Algal oil to biodiesel market @ US$650/tonne (conservatively priced at a discount to soy @ US$900/tonne, and canola oil @ US$1100/tonne). • Biomass product to animal feed & other markets @ US$350/tonne (Animal feed @ US$450/tonne). • Revenue from Oil of ~US$406mand revenue from Biomass of ~US$219m. • Early stage estimated operating costs of US$185/tonne or ~US$231min total. • Estimated EBITDA of ~US$394mper annum.

10. Business Development Algae. Tec has signed a number of significant MOUs • Leighton Contractors: • Provide engineering services to the Company for Demonstration site etc in kind contribution. • Provide services for the completion of all approvals required for Demonstration facility and commercial facilities. • Construction services. • Project operating services. • Manildra Group (Starch & Ethanol Producer at their Nowra facility): • Provide site and backup services for the Demonstration Facility and the first Commercial Facility located adjacent to ethanol fermenters to capture all CO2 emissions. • Offtake agreements. • RKD International and Pacific Minerals (Chinese Group based in Hong Kong): • Introduce the Company to appropriate group to obtain IP protection under "Chinese Law“. • Procure an appropriate manufacturing company for module fitout. • Assist in project funding. • Procure project opportunities. • Work with EPA to have technology universally recognised.

11. “Strong cash position post IPO” Algae. Tec will be in a strong position following the IPO cash injection • Algae.Tec are aiming to raise A$7.5 million at a IPO valuation of A$52 million. • Use of Funds: • Build and operate a Module Demonstration Plant based on successful pilot plant tests. • Aim to complete the demonstration plant by August 2011. • Continuation of laboratory evaluations of key microalgae species for productivity and yield improvements. • Current Module optimization program is focused on final engineering design specifications and module cost improvements. • Initial commercial projects will be scoped and negotiated during Demonstration Plant operations, target completion of a 250/500 module facility by end of 2012. • Algae.Tec will initially target CO2 emitting sources in Australia, US and China. • Algae.Tec strives to operate the first Commercial algae production facility in the world

12. Company Profile & Leadership A renewable energy company with offices/facilities in Perth (WA) and Atlanta (US). Algae.Tec is a collaborative of US and Australian expertise supported by specific universities in each country. A highly qualified global team with over 200 years of technical, business and professional expertise in key energy and environmental industries. • Earl McConchie(Executive Director) – BS/ME Chemical Engineering with 36 years of chemical, energy and biofuel industry experience in technology development, engineering, manufacturing and executive business leadership. Over a successful 25 year career with Dow Chemical Earl was able to secure 30 patents on behalf of Dow. • Roger Stroud (Executive Chairman) – BSc Chemistry/Geology, BA (Economics) with 35 years of technical and business management experience in manufacturing industries, including materials and biofuel sectors. • Peter Hatfull(Managing Director & Company Secretary)– Chartered Accountant (ACA, MAICD) with 30 years of business and financial experience in senior executive positions with Australian and International companies. • Timothy Morrison (Non Executive Director)– Many years experience in commercial and scientific activities as current director of Research and Development at Murdoch University. One of the faculties under his control is the Department of Phycology, containing one of the two largest algae banks in Australia. • Additional key operating staff (7 employees) with energy industry expertise in engineering, project management, operations, sales and marketing.

13. Capital Structure Algae.Tec is offering approximately 14.25% of the company for a total consideration of $7.5m The IPO is closing on 15 November 2010