Think Outside The Grid!
June 2010
ADGE - Europe
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Forward Looking Statements
We have made statements in this presentation that constitute “forward-looking statements” as that
term is defined in the Private Securities Litigation Reform Act of 1995 and other federal securities
laws. These forward-looking statements concern our operations, economic performance, financial
condition, goals, beliefs, future growth strategies, investments objectives, plans and current
expectations. Any statements in this presentation that are not statements of historical fact are
forward-looking statements (including, but not limited to, statements regarding our future financial
performance, statements concerning scaling our business, expected revenue leverage, the
characteristics and growth of markets and customers, our objectives and plans for future
operations, technology developments and products and our expected liquidity and capital
resources). Such forward-looking statements are based on a number of assumptions and involve a
number of risks and uncertainties, and accordingly, actual results could differ materially. Risk
factors that may cause such differences are described in our Securities and Exchange Commission
filings. You should not rely upon forward-looking statements except as statements of our present
intentions and of our present expectations, which may or may not occur. You should read these
cautionary statements as being applicable to all forward-looking statements wherever they appear.
Except as required by law, we undertake no obligation to release publicly the result of any revision
to these forward-looking statements that may be made to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.
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Background at a Glance
Thermo Electron’s market capitalization increased approximately 31%
(on a compounded basis from 1983-1997)
Thermo Electron, now Thermo Fisher Scientific is currently over $20
billion in market capitalization
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Management (US)
Dr. George Hatsopoulos, Chairman of the Board
Co-founder and Chairman Emeritus of Thermo Electron Corporation
John Hatsopoulos, Chief Executive Officer
Co-founder and retired President and Vice Chairman of the Board of Thermo Electron
Corporation
Barry Sanders, President & Chief Operating Officer
Former Executive Vice President of MicroLogic, Inc.
Business Development at Tecogen and Andover Controls
Managed research and development projects for the New York State Energy Research and
Development Authority
Anthony Loumidis, Chief Financial Officer
Chief Financial Officer, Principal Accounting Officer and Treasurer of American DG Energy Inc.
and GlenRose Instruments Inc.
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Board of Directors (US)
Dr. George Hatsopoulos, Chairman of the Board
John Hatsopoulos, Chief Executive Officer
Earl R. Lewis
Chairman of the Board, Chief Executive Officer and President of FLIR Systems Inc.
(NASDAQ:FLIR)
Charles T. Maxwell
Senior Energy Analyst with Weeden & Co.
Deanna M. Petersen
Vice President of Business Development for Shire Human Genetic Therapies
(NASDAQ:SHPGY)
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What We Do
American DG Energy Inc. is a leading On-Site Utility company,
providing highly efficient electricity, heat, hot water, and cooling
energy.
We target healthcare facilities, multi-family buildings and hotels, and
offer a long-term energy solution at a guaranteed discount to retail
utility prices through long-term (typically 15 year) contracts.
Our services enable cost reductions from Day One, often 10% in
energy costs (operating expenses) for customers, and a growing
base of recurring revenue for ADGE.
Our focus is energy efficiency – “Here and Now”
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Our Customer Value Proposition
Guaranteed lower price for energy
Typically 10% discount on customer’s utility rates
No capital or operating costs
Only pay for energy used
Increased net income
Immediate cash flow improvement
No staffing, operations and equipment
responsibilities
Extends customer boiler life
Provides green energy technology
Combined Heat & Power (CHP)
Fuel (natural gas)
IN
Hot Water & Heat
OUT
Electricity
OUT
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Energy Efficiency (~90%)
Source: Company Estimates
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Go Green While $aving Green
CHP Reduces CO2 by 607 tons/year *
EPA CHP partner
DOE EPA Energy Star efficiency award winner
Equivalent to:
*Source: EPA CHP calculator on web site; 150 kW, 6,000 Hrs/yr
166 acres
104 cars
Energy Efficiency: Thermal Load
Source: Company Estimates
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Thermal = Domestic Hot Water, Space Heating, Laundry, Banquet, Heating Pools, Process, etc.
Made By 150 kW CHP
Supplied By Boiler
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
MONTHLY HOT WATER & HEATING LOAD
Energy Efficiency: Electricity Supply
Source: Company Estimates
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Made By 150 kW CHP
Supplied by Utility Grid
0
50
100
150
200
250
300
350
400
450
500
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
MONTHLY ELECTRICITY DEMAND
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Technology Comparison (100kW systems)
COMBINED HEAT & POWER
SOLAR PV
MICROTURBINE
WIND
Source: Company Estimates
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Technology Comparison (100kW systems)
COMBINED HEAT & POWER
SOLAR PV
MICROTURBINE
WIND
Source: Company Estimates
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Business at a Glance
On-Site Utility (Selling discounted energy)
Electricity, heat, hot water and cooling
Monthly billing
Long term agreements (15 years)
Eligible for - carbon credits trading programs
Demand response program
Own and Operate Energy Systems
Combined, heat and power (CHP), chilled water, with
seamless integration of other alternative energy
technologies
Energy produced at customer’s site - sold “inside fence”
to customer
ADGE finances, designs, installs, maintains, monitors &
optimizes systems
ADGE usually keeps all incentive funding
Turn-key System Sales
We can also sell an installed system if that’s what the
customer wants + Back-end Services
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Market Sizes for CHP Applications
* Sources: 2006/7 ERIC data analysed by BRE; Hotel Data Ltd , July 2009; Sure – FIT High Rise report, June 1, 2007. European Study
into high rise dwelling in the EU 27; Overview of CHP – a country by country analysis – COGEN, July 2009; Cogeneration in Central
and Eastern Europe – COGEN, June 2007, et al.
Healthcare
Hotels
Housing
kW
Phase 1
UK
1,924
2,450
948
1,234,000
Spain
757
3,368
30,400
7,782,000
Belgium
311
249
442
231,000
Total
2,992
6,067
31,790
9,247,000
Phase 2
Ireland
49
232
n/a
64,000
Italy
1,459
1,653
82,500
19,290,000
Poland
328
239
31,000
7,109,000
Germany
3,499
2,479
12,500
4,223,000
Total
5,335
4,603
126,000
30,686,000
Total
(Phase 1 & 2)
8,327
10,670
157,790
39,933,000
Tecogen/ADGE Installations
Tecogen: Shipped Over 2,000 Systems
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Areas where electricity costs exceed $0.12 per kWh: Massachusetts, New Hampshire, Connecticut, New York,
New Jersey, California are main targets. Comprise approximately 15% of U.S. commercial power market with
electricity revenues in excess of $19 billion per year *
NY
NJ
MA
ADGE: Operating 70 Systems (as of 6/10)
* Source: The Market and Technical Potential for Combined Heat and Power in the Commercial/Institutional
Sector; The Market and Technical Potential for Combined Heat and Power in the Industrial Sector;
Prepared for the Energy Information Administration; Prepared by ONSITE SYCOM Energy Corporation;
January 2000
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Typical Customer Buildings
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Sales Strategy
On-Site Utility Solution
Sell cash flow and net income (not energy and equipment)
No capital required by customer
No staffing required
Keep it simple
Executive Sales
“C-Level”
Fulfill Government and Environmental Mandate
On-Site Utility is an easy, cost-effective solution
Top 50 Sales
Focus on large property owners in key vertical markets (Hotels, Healthcare & Housing)
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Sales Distribution
Direct
Senior level, sales executives
Proven, “C-Level” Sales
Partners
Experts in targeted, vertical markets
Energy consultants
Engineering design contractors
Key, established suppliers
Advisory Board
Individuals with access to executives at targeted, vertical markets
PCS
Power
Conditioning
System
TecoNet
Control
System
3 Phase AC
Power
Variable
Frequency
Neutral
AC Power
480/3/60 PF
= 1.0 *
Neutral
Generator/PCS
Cooling
Engine Heat
Recovery
Exhaust Heat
Exchanger
Catalytic Converter
Natural Gas
Exhaust
Engine
PMG
Engine
Coolant
Pump
Gen/PCSP
ump
New Technology Developments:
InVerde 100
1.
Only engine-based CHP with inverter on the market
2.
Provides convenience back-up power
3.
Designed for world market
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New Technology Developments: Ilios Inc.
Advanced heating systems for commercial and industrial applications
Efficiency = 485,000/238,000 = 204%
Heat Exchanger
Condenser
Compressor
Engine
Hot Water
Evaporator Coil
Natural Gas
IN
OUT
IN
238,000 Btu/hr
485,000 Btu/hr
Efficiency
= 204%
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Competition
Electric utilities
Lack of entrepreneurial drive and several past failures to enter new businesses
No operational capabilities
Today: ADGE partner
Equipment manufacturers - (ENER-G, Cogenco, SenerTec)
Lack financing capability
Larger systems (footprint and kW)
All are potential suppliers or partners
Local contractors - (Various small contractors)
Small, individual project orientation
ADGE partner opportunity for individual projects
Future acquisition option
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Revenue Leverage (Example)
Annual*
Term (15 years)
Revenue
£225,000
£3,900,000
Gross margin
£67,000
£1,160,000
Customer savings
£25,000
£435,000
Equipment: 200 kW CHP System
ADGE Investment: £275,000
ADGE Payback*: 4 years
ADGE IRR*: 25%
* Estimated
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Financial Data – Base*
*Additional capital will be raised through either debt or equity offering(s).
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Financial Data – Upside*
*Additional capital will be raised through either debt or equity offering(s).
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Europe Advantages
Large Market
Major cities with high density of target customers (Hotels, Healthcare & Housing)
Customers Actively Seeking Energy/Environmentally Friendly Solutions
Government mandates
Pro-Government Policies
Active with energy efficiency and technology
Expected to continue
Significant Support Mechanisms
Both capital and operating
Expected to continue
Active Carbon Economy
CHP qualifies
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Europe Advantages (con’t)
Capital Crunch fits On-Site Utility
Availability for project financing is very difficult
Reduced Staffing fits On-Site Utility
Favorable Energy Pricing
Electricity rates are expected to rise
Natural Gas availability and pricing is expected to be stable
Minimal Competition
Focused on larger kW projects
Not active with On-Site Utility solution
Very technical versus business orientation
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Europe Advantages (con’t)
United States Experience
Head start
Available resources
Use back office functions such as system monitoring, billing, etc.
Experienced and Knowledgeable Workforce
Many available candidates
Excellent Technology Fit: Inverde 100 kW
kW size perfect for customer’s buildings
Small footprint will fit into tight spaces
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ADGE Europe - Offering Terms
Entity: ADGE Europe (a subsidiary of American DG Energy Inc.)
Offering Amount: $5 million - $10 million
Type of Security: Common Stock
Shares Outstanding (pre-offering): 10,000,000
American DG Energy Inc.: 9,000,000
Codale Ltd: 1,000,000
Price per Share: TBD
Minimum Investment: $100,000
Use of Proceeds: European Expansion
Country of Incorporation: TBD
ADGE - Europe
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American DG Energy Inc.
45 First Avenue
Waltham, MA 02451
p: 781.522.6000
f: 781.522.6050
info@americandg.com
www.americandg.com
Thank You