novo grass roots research report

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Copyright © 2009 by Grass Roots Research and Distribution, Inc. All rights reserved. This report may not be reproduced.

June 30, 2009

Symbol NVNCExchange NASDAQRecommendation BUYCurrent Price 0.2052 Week High/Low 0.25/0.03Avg daily volume (3 mo.) 9,000Shares Outstanding 24.92MCurrent Market Value 5.00MBeta (36 Month) Average 2.90

Cohen!Price!Target!Index in!$ Cohen!Short"Term!Price!Target!Index 0.36 !! !Cohen!Medium"Term!Price!Target!Index 0.71 !! !Cohen!Long"Term!Price!Target!Index 1.25 !! !

INVESTMENT THESIS AND RECOMMENDATION

Novo Energies Corporation (OTCBB: NVNC) is an exciting renewable energy company. TheCompany, through its subsidiary WTL Renewable Energy Corporation, has developed and designedan effective and novel proprietary process which combines thermolysis and gasification to transform plastics and tires to liquid fuels. This will ensure positive fuel plant conversion economics becausegasification is likely to reduce the energy required to convert waste to liquid fuels. Secondly, use ofplastics and tires also ensures abundant raw material supply. Both these factors should boost theCompany’s margins. On our top-line scenario, we expect the Company to benefit from multiplesources of revenues including sales of liquid fuels and other by-products.

The Company intends to become a leader in the waste to energy industry. The alternative energyindustry is likely to grow exponentially over the next couple of decades as a major worldwideimpetus is provided to reduce depletion of natural resources and reduce dependence on foreign oil.

Revenues are expected to grow from $5.7 million for FYE March 31, 2010 to more than $570.0million by FYE 2016. The Company will have to raise cash to reach our forecasts. We believe NovoEnergies is a compelling opportunity for risk-averse investors.

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EXECUTIVE SUMMARY

! Novo Energies Corporation (OTCBB: NVNC) is focused on converting plastics and tire waste toliquid fuels such as diesel, gasoline and fuel additives, thus expanding its presence in the alternativeenergy industry.

! The Company plans to build small local industrial plants designed to transform residual plastics andtires to valuable liquid Low Carbon Fuels such as diesel, gasoline and fuel additives.

! The Company’s subsidiary, WTL Renewable Energy Corporation, has developed and designed aneffective and novel proprietary process which combines thermolysis and gasification to transformplastics and synthetic tires to liquid fuels such as diesel, gasoline and fuel additives.

! The U.S. government is encouraging more economical renewable energy sources due to its growing concern over the impact of conventional fuels on the environment. These concerns, coupled withfactors such as depleting oil reserves, combine to drive demand for renewable energy sources.

! Spurred by growing political concerns in Middle East, increase in demand for oil from developing nations and rising oil prices, have led to alternative fuels quickly becoming vital to domestic energysupplies.

! As a result, the projected growth for this new and exciting business opportunity of conversion ofwaste-to-liquid fuel is estimated at 10% to 50% per year. Novo Energies plans to capitalize on thisimpending growth in demand for alternative fuels.

! The Company is in a better position to benefit from the projected growth in demand for alternativeenergy sources, as it plans to use the abundant supplies of plastic and tire as its raw material sources.

Financial Forecasts and Valuation

! We project revenues of $5.7 million for FYE 2010 and more than $570 million by 2016. These projections are based on the Company’s plant construction schedule, sustained level of capitalexpenditure and pipeline of opportunities. The Company will have to raise cash to meet ourforecasts.

! Our short-term price target of $0.36 is derived using the multiple based valuation approach whichuses the Price-to-Earnings and Price-to-Book Value ratios. This represents an upside potential of 80% over the current market price of $0.20.

! We have our targeted multiple approach of valuation to derive our intermediate term price target.Based targeted Price-to-Earnings and Price-to-Sales ratios and Base Case financial forecasts, the Novo common stock is valued at $0.71.

! We have valued the stock using our Discounted Cash Flow (DCF) method to arrive at long-term price target of $1.25, reflecting forward P/E multiples of 29.5x and 16.3x our estimated FYE 2010 EPS andFYE 2011 EPS, respectively.



ABOUT THE COMPANY Novo Energies Corporation (OTCBB: NVNC) is focused on expanding its presence in the renewable energy sector by developing and implementing solutions and technology. The Company’s mission is to develop such solutions while maintaining its commitment to conserve energy, natural resources and help reduce pollutants and unwanted biological agents. The Company’s subsidiary, WTL Renewable Energy Corporation, has developed and designed an effective and novel proprietary process which combines thermolysis and gasification to transform plastics and synthetic tires to liquid fuels such as diesel, gasoline and fuel additives. The Company plans to build small local industrial plants designed to transform residual plastics and tires to valuable liquid Low Carbon Fuels such as diesel, gasoline and fuel additives.

UNDERSTANDING WASTE-TO-LIQUID SOLUTION

Waste-to-Liquid (WTL) or energy-from-waste (WtE) is the process of creating energy in the form of electricity or heat from waste sources. It is a form of energy recovery that produces electricity using various processes such as:

! Gasification (produces combustible gas, hydrogen, synthetic fuels) ! Thermal Depolymerization (produces synthetic crude oil, which can be further refined) ! Pyrolysis (produces combustible tar/bio-oil and chars) ! Plasma arc gasification (PGP) or plasma gasification process (produces rich syngas including

hydrogen and carbon monoxide usable for fuel cells or generating electricity to drive the plasma arch, usable vitrified silicate and metal ingots, salt and sulphur)

ADVANTAGE OF WASTE-TO-LIQUID SOLUTION

These non-polluting waste-to-Low Carbon Fuels facilities will be able to provide energy to nations seeking independence from petroleum-based fuels, while also helping solve those nation’s environmental problems. The exhibit below highlights the advantage of waste-to-liquid opportunity when compared to other conventional source of energy:



Figure 1: Overview of Competitive Advantages of WTL Solution

Source: Company Presentation

! Renewable Source of Energy – produced from plastic and tire waste ! Superior Economics – when compared to other renewable energy sources, waste-to-liquid is a

cost effective source of energy ! Abundance Raw Material Supply – unlike other raw materials used for renewable energy, this

solution uses plastic and tire wastes which are readily available ! Landfill Development – dramatically extending the useful life by radically reducing the volume

of recyclable waste being dumped and ultimately reducing the size of the existing landfill ! Reducing Foreign Oil Dependency – providing self-sufficient fuel sources of synthetic fuels in-

country ! Local Economics – creating local jobs, development of economically disadvantaged, generating

tax revenue to the community and energy savings for consumers.



COMPANY BUSINESS MODEL

Novo Energies plans to use plastic and tire as raw material to convert the same to liquid fuels provides two-fold advantages as shown below:

Figure 2: Waste-to-Liquid Opportunity - Advantages


The Company’s business model is based primarily on revenues from the sale of fuel and other by-products such as steel plates and carbon black.



Figure 3: Proposed Business Approach


The key to Novo’s business model is the use of right technology and process. The Company proposes to combine the gasification and thermolysis processes in a novel manner as it will be able to achieve the desired level of fuel production with initial levels of energy required for the process being generated from gasification.

Figure 4: Plastic Waste-to-Liquid Fuel Process




Figure 5: Tire Waste-to-Liquid Process




COMPANY GROWTH DRIVERS Figure 6: Novo’s Growth and Value Drivers

Source: Cohen Research

FINANCIAL FORECASTS Figure 7: Revenue Forecasts – Base Case

Figure 8: Sales, Earnings and Margin Forecasts – Base Case

Strong focus on commercialization of superior technology platform and potential build-up of new facilities will result in projected revenues of $5.7 million for FYE 2010 and $28.5 million in FYE 2011.

Unique!Business!Model

Innovative!Technology!

Huge!Industry!

Opportunity!

Experienced!Management!

Team!

•Conversion!of!plastic!and!tire!waste!to!liquid!fuels•Reduces!waste!and!converts!the!same!to!energy•Abundant!raw!material!availability•Multiple!sources!of!revenues

•Company!plans!to!use!a!combination!of!Gasification!and!Thermolysis.•Increases!the!net!fuel!production!in!the!entire!process

•World!energy!demand!expected!to!grow!by!44%!over!the!period!between!2006"2030•Renewed!focus!on!alternative!energy!sources!to!reduce!foreign!dependence

•Proactive!and!forward!looking!management!team!with!significant!experience!in!this!field.•Company!well!placed!for!strong!and!rapid!growth.

all!figures!in!$!million 2010E 2011E 2012E 2013E 2014E 2015E 2016EPlastic!Segment!"#$%&'()*+,&"-&.%$/#0 123&&&&&&&&&&&&&&&& 423&&&&&&&&&&&&&&&& 1323&&&&&&&&&&&&& 5423&&&&&&&&&&&&& 4323&&&&&&&&&&&&& 6423&&&&&&&&&&&&& 13323&&&&&&&&&&&7+8+/(+0&9+,&9%$/# 525&&&&&&&&&&&&&&&& 525&&&&&&&&&&&&&&&& 525&&&&&&&&&&&&&&&& 525&&&&&&&&&&&&&&&& 525&&&&&&&&&&&&&&&& 525&&&&&&&&&&&&&&&& 525&&&&&&&&&&&&&&&&%!growth 323: 323: 323: 323: 323: 323:TOTAL!REVENUES 525&&&&&&&&&&&&&&&& 1123&&&&&&&&&&&&& 5523&&&&&&&&&&&&& 4423&&&&&&&&&&&&& 11323&&&&&&&&&&& 1;423&&&&&&&&&&& 55323&&&&&&&&&&&Tire!Segment!"#$%&'()*+,&"-&.%$/#0 123&&&&&&&&&&&&&&&& 423&&&&&&&&&&&&&&&& 1323&&&&&&&&&&&&& 5423&&&&&&&&&&&&& 4323&&&&&&&&&&&&& 6423&&&&&&&&&&&&& 13323&&&&&&&&&&&7+8+/(+0&9+,&9%$/# <24&&&&&&&&&&&&&&&& <24&&&&&&&&&&&&&&&& <24&&&&&&&&&&&&&&&& <24&&&&&&&&&&&&&&&& <24&&&&&&&&&&&&&&&& <24&&&&&&&&&&&&&&&& <24&&&&&&&&&&&&&&&&%!growth 323: 323: 323: 323: 323: 323:TOTAL!REVENUES <24&&&&&&&&&&&&&&&& 1624&&&&&&&&&&&&& <423&&&&&&&&&&&&& =624&&&&&&&&&&&&& 16423&&&&&&&&&&& 5;524&&&&&&&&&&& <4323&&&&&&&&&&&TOTAL!REVENUES 426&&&&&&&&&&&&&&&& 5=24&&&&&&&&&&&&& 4623&&&&&&&&&&&&& 1>524&&&&&&&&&&& 5=423&&&&&&&&&&& >5624&&&&&&&&&&& 46323&&&&&&&&&&&

all!figures!in!$!million 2010E 2011E 2012E 2013E 2014E 2015E 2016E7+8+/(+0 426&&&&&&&&&&&&&&&& 5=24&&&&&&&&&&&&& 4623&&&&&&&&&&&&& 1>524&&&&&&&&&&& 5=423&&&&&&&&&&& >5624&&&&&&&&&&& 46323&&&&&&&&&&&%!growth 0.0% 400.0% 100.0% 150.0% 100.0% 50.0% 33.3%

?,"00&.,"-@# >2<&&&&&&&&&&&&&&&& 512>&&&&&&&&&&&&& >52=&&&&&&&&&&&&& 13;2A&&&&&&&&&&& 51<2=&&&&&&&&&&& <532;&&&&&&&&&&& >5624&&&&&&&&&&&Gross!Profit!Margin 75.0% 75.0% 75.0% 75.0% 75.0% 75.0% 75.0%

BCD!EF 52<&&&&&&&&&&&&&&&& 1126&&&&&&&&&&&&& 5<24&&&&&&&&&&&&& 4=2;&&&&&&&&&&&&& 1162<&&&&&&&&&&& 1642A&&&&&&&&&&& 5<>24&&&&&&&&&&&EBITDA!Margin 41.1% 41.1% 41.1% 41.1% 41.1% 41.1% 41.1%

'+#&.,"-@# 123&&&&&&&&&&&&&&&& ;26&&&&&&&&&&&&&&&& 1126&&&&&&&&&&&&& 542;&&&&&&&&&&&&& >A26&&&&&&&&&&&&& 6324&&&&&&&&&&&&& A52=&&&&&&&&&&&&&Net!Profit!Margin 17.4% 23.4% 20.6% 18.0% 17.4% 16.5% 16.3%

B$,/@/G0&.+,&HI$,+&J&C$0@K&L&E@%(#+M 32355&&&&&&&&&&& 321>A&&&&&&&&&&& 325;5&&&&&&&&&&& 3246<&&&&&&&&&&& 12111&&&&&&&&&&& 1246=&&&&&&&&&&& 52364&&&&&&&&&&&N,++&O$0I&N%"P&#"&N@,) Q62;R&&&&&&&&&&&&&& Q<2;R&&&&&&&&&&&&&& Q1;25R&&&&&&&&&&&& Q<32=R&&&&&&&&&&&& Q<>2>R&&&&&&&&&&&& 1>24&&&&&&&&&&&&& ;<2>&&&&&&&&&&&&&



With financing, we project revenues to grow thereafter from $57.0 million in FYE 2012 to $570.0 million by FYE 2016. The key driver for this growth is the continued demand for alternative energy solutions. Due to its multiple sources of revenues and constant nature of business operations we expect Novo’s gross margins to remain constant throughout our forecast period (Management Guidance). However, as the Company constructs larger projects, we expect operating expenses to increase at a decreasing rate, resulting in higher operating and net profit margins. The robust industry demand coupled with continuous focus on cost effective and efficient energy solutions will drive Novo’s operations in North America. Growth prospects are impressive and depend on the successful fund raising by the Company.

VALUATION SHORT TERM PRICE TARGET $0.36

We have valued the stock using Multiple Based Valuation Methodology to derive our short-term target price. This method uses the industry average 2009E Price-to-Equity and Price-to-Book Value multiple. Our formula is shown below.

Figure 9: Short-Term Multiple-based Valuation

INTERMEDIATE TERM PRICE TARGET $0.71 Our Intermediate term price valuation methodology is based on Multiple Based Valuation Methodology. Note: for companies such as Novo which are still in early inception stages, we use the expected multiple method to derive our intermediate term price target.

Description Market!Cap!($Mn) Price!to!Earnings Price!To!Bk.!ValS$0#+&T$/$G+)+/#U&D/K2 1<2A3C 1<2A&&&&&&&&&&&&&&&&&&&&&&&& 52>&&&&&&&&&&&&&&&&&&&&&&&&&&&7+9(*%@K&H+,8@K+0&D/K2 A23;C 4<2>&&&&&&&&&&&&&&&&&&&&&&&& 125&&&&&&&&&&&&&&&&&&&&&&&&&&&H#+,@KVK%+&D/K2 >2<3C 5=25&&&&&&&&&&&&&&&&&&&&&&&& ;2<&&&&&&&&&&&&&&&&&&&&&&&&&&&S$0#+&O"//+K#@"/0&D/K2 12A4C 162<&&&&&&&&&&&&&&&&&&&&&&&& 124&&&&&&&&&&&&&&&&&&&&&&&&&&&O%+$/&W$,*",0&D/K2 1256C 5>23&&&&&&&&&&&&&&&&&&&&&&&& 52A&&&&&&&&&&&&&&&&&&&&&&&&&&&Average!Ratios!(used!for!valuation) 27.4!!!!!!!!!!!!!!!!!!!!!!! 2.9!!!!!!!!!!!!!!!!!!!!!!!!!!

'"8"&B/+,G@+0B.H&Q5313B&J&5315BR 321&&&&&&&&&&&&&&&&&&&&&&&&&&&C""X&Y$%(+&Q5313B&J&5315BR 1323&&&&&&&&&&&&&&&&&&&&&&&&

Market!Cap!based!on!"! 4.0!!!!!!!!!!!!!!!!!!!!!!!!!! 28.5!!!!!!!!!!!!!!!!!!!!!!!HI$,+0&Z(#0#$/M@/G >>26&&&&&&&&&&&&&&&&&&&&&&&& >>26&&&&&&&&&&&&&&&&&&&&&&&&Price!Target!based!on!" 0.09!!!!!!!!!!!!!!!!!!!!!!! 0.64!!!!!!!!!!!!!!!!!!!!!!!

Short!Term!Target!Price 0.36!!!!!!!!!!!!!!!!!!!!!!!



Figure 10: Intermediate Term Multiple-based Valuation Methodology

LONG TERM PRICE TARGET $1.07-$1.47 We have used our Discounted Cash Flow (DCF) method of valuation to create our Long-term per Share Price Target. Using an assumed cost of equity of 20%, our Base Case target price is a conservative $1.25 per share. Note our three assumed cases: Base, Optimistic, and Pessimistic.

Figure 11: Discounted Cash Flow Method of Valuation – Base Case

Description Price!to!Earnings Price!To!Bk.!ValB[9+K#+M&D/M(0#,V&F8+,$G+&J&531< 1=254&&&&&&&&&&&&&&&&&&&&&& 12A1&&&&&&&&&&&&&&&&&&&&&&&&'"8"&B/+,G@+0&J&531< 3246&&&&&&&&&&&&&&&&&&&&&&&& >42;1&&&&&&&&&&&&&&&&&&&&&&

Market!Cap.!2013 10.45!!!!!!!!!!!!!!!!!!!!! 86.93!!!!!!!!!!!!!!!!!!!!!HI$,+0&Z(#0#$/M@/G >>263&&&&&&&&&&&&&&&&&&&&&& >>263&&&&&&&&&&&&&&&&&&&&&&Price!Target 0.23!!!!!!!!!!!!!!!!!!!!!!! 1.94!!!!!!!!!!!!!!!!!!!!!!!

Average!Price!in!2013 1.09!!!!!!!!!!!!!!!!!!!!!!!E@0K"(/#&N$K#", 32<4&&&&&&&&&&&&&&&&&&&&&&&&Intermediate!Term!Target!Price 0.71!!!!!!!!!!!!!!!!!!!!!!!

all!figures!in!$!million 2010E 2011E 2012E 2013E 2014E 2015E 2016E'+#&D/K")+ 123&&&&&&&&&&&&&&&& ;26&&&&&&&&&&&&&&&& 1126&&&&&&&&&&&&& 542;&&&&&&&&&&&&& >A26&&&&&&&&&&&&& 6324&&&&&&&&&&&&& A52=&&&&&&&&&&&&&E+9,+K@$#@"/ 125&&&&&&&&&&&&&&&& <2>&&&&&&&&&&&&&&&& =2<&&&&&&&&&&&&&&&& 1=2A&&&&&&&&&&&&& <A2A&&&&&&&&&&&&& ;;21&&&&&&&&&&&&& A52<&&&&&&&&&&&&&D/#+,+0#&."0#&!$[ J&&&&&&&&&&&&&&& 32>&&&&&&&&&&&&&&&& 125&&&&&&&&&&&&&&&& 525&&&&&&&&&&&&&&&& >24&&&&&&&&&&&&&&&& ;2<&&&&&&&&&&&&&&&& ;2=&&&&&&&&&&&&&&&&NOPLAT 2.2!!!!!!!!!!!!!!! 10.5!!!!!!!!!!!! 21.2!!!!!!!!!!!! 46.7!!!!!!!!!!!! 94.0!!!!!!!!!!!! 142.9!!!!!!!!!! 191.8!!!!!!!!!!OI$/G+&@/&S",X@/G&O$9@#$% Q<26R&&&&&&&&&&&&&& 626&&&&&&&&&&&&&&&& Q132>R&&&&&&&&&&&& 124&&&&&&&&&&&&&&&& 524&&&&&&&&&&&&&&&& 524&&&&&&&&&&&&&&&& 524&&&&&&&&&&&&&&&&O$9@#$%&B[9+/M@#(,+ Q;25R&&&&&&&&&&&&&& Q512=R&&&&&&&&&&&& Q5623R&&&&&&&&&&&& Q6A23R&&&&&&&&&&&& Q1<123R&&&&&&&&& Q1<123R&&&&&&&&& Q1<123R&&&&&&&&&Free!Cash!Flow!to!Firm!(FCF) (7.6)!!!!!!!!!!!!! (3.6)!!!!!!!!!!!!! (16.2)!!!!!!!!!!! (30.8)!!!!!!!!!!! (34.4)!!!!!!!!!!! 14.5!!!!!!!!!!!! 63.4!!!!!!!!!!!!Present!Value!of!FCF (6.4)!!!!!!!!!!!!! (2.9)!!!!!!!!!!!!! (11.3)!!!!!!!!!!! (19.3)!!!!!!!!!!! (18.9)!!!!!!!!!!! 6.6!!!!!!!!!!!!!!! 23.1!!!!!!!!!!!!

SFOO 5323: 112A: 1526: 152>: 152=: 1>21: 1424:O"0#&"-&B\(@#V 53:

!+,)@/$%&?,"P#I&7$#+ 4:!+,)@/$%&Y$%(+ 5<12;&&&&&&&&&&&Present!Value!of!Terminal!Value 84.5!!!!!!!!!!!!

Total!Enterprise!Value! 55.5!!!!!!!!!!!!]+00 &̂'+#&E+*# 325>&&&&&&&&&&&&&Total!Project!Equity!Value 55.7!!!!!!!!!!!!!"#$%&HI$,+0&Z(#0#$/M@/G >>26&&&&&&&&&&&&&Per!Share!Price!Target 1.25$!!!!!!!!!!



Figure 12: Range of Long-term Target Price based on range of Discount Rate

Figure 13: Range of Long-term Target Price based on range of Terminal Growth Rate

We believe all our price targets are conservative because our forecast for Novo’s revenues in 2009 and 2010 is based on minimal investment in capital generating assets i.e. plants. Any additional capital expenditure will add to the top-line and bottom line, thus resulting in potentially higher share prices. As a practical matter, if Novo receives between $8-$10 million of funding, the stock could trade at significantly higher prices in the immediate term.

22.0% 21.0% 20.0% 19.0% 18.0%

Optimistic!Case 1.18! 1.42! 1.72! 2.07! 2.49!

Base!Case 0.78! 1.00! 1.25! 1.54! 1.90!

Pessimistic!Case 0.43! 0.61! 0.82! 1.08! 1.38!

"

0.50!

1.00!

1.50!

2.00!

2.50!

3.00!in!US$

Long!Term!Price!Target!Range!"Range!of!Cost!of!Equity

3.0% 4.0% 5.0% 6.0% 7.0%

Optimistic!Case 1.40! 1.55! 1.72! 1.92! 2.17!

Base!Case 0.91! 1.07! 1.25! 1.47! 1.74!

Pessimistic!Case 0.49! 0.64! 0.82! 1.05! 1.33!

0.40!0.60!0.80!1.00!1.20!1.40!1.60!1.80!2.00!2.20!2.40!

in!US$

Long!Term!Price!Target!Range!"Range!of!Terminal!Growth!Rate



COHEN GROWTH DRIVER ANALYSIS Figure 14: Cohen Growth Driver Analysis – Base Case

The Cohen Growth Drivers Model is an intelligent road map used by many securities analysts to analyze the forecasted growth of a given company. We expect significant top-line growth driven by the Company’s expected plant commercialization. We believe our estimates are conservative as they are based on the current capital spending capacity of the Company and do not include any additional capital expenditure the Company may have in due course. Also, gross and operating margin projections are kept constant.

all!figures!in!$!million 2010E 2011E 2012E 2013E 2014E 2015E 2016E7+8+/(+0 426&&&&&&&&&&&&&&&& 5=24&&&&&&&&&&&&& 4623&&&&&&&&&&&&& 1>524&&&&&&&&&&& 5=423&&&&&&&&&&& >5624&&&&&&&&&&& 46323&&&&&&&&&&&?,"00&T$,G@/ 6423: 6423: 6423: 6423: 6423: 6423: 6423:Z9+,$#@/G&T$,G@/ >121: >121: >121: >121: >121: >121: >121:'+#&T$,G@/&J&D/K")+&F8$@%2&!"&HI,+I"%M+,0 162>: 5<2>: 532;: 1=23: 162>: 1;24: 1;2<:B.H&J&E@%(#+M 3235&&&&&&&&&&&&& 3214&&&&&&&&&&&&& 325;&&&&&&&&&&&&& 3246&&&&&&&&&&&&& 1211&&&&&&&&&&&&& 124=&&&&&&&&&&&&& 523=&&&&&&&&&&&&&BCD!EF 52<&&&&&&&&&&&&&&&& 1126&&&&&&&&&&&&& 5<24&&&&&&&&&&&&& 4=2;&&&&&&&&&&&&& 1162<&&&&&&&&&&& 1642A&&&&&&&&&&& 5<>24&&&&&&&&&&&N,++&O$0I&N%"P Q;2>R&&&&&&&&&&&&&& Q52AR&&&&&&&&&&&&&& Q112<R&&&&&&&&&&&& Q1A2<R&&&&&&&&&&&& Q1=2AR&&&&&&&&&&&& ;2;&&&&&&&&&&&&&&&& 5<21&&&&&&&&&&&&&O$0I 325&&&&&&&&&&&&&&&& A2<&&&&&&&&&&&&&&&& <25&&&&&&&&&&&&&&&& 62=&&&&&&&&&&&&&&&& 1A26&&&&&&&&&&&&& >;25&&&&&&&&&&&&& A62A&&&&&&&&&&&&&S",X@/G&O$9@#$% Q<26R&&&&&&&&&&&&&& Q112>R&&&&&&&&&&&& Q123R&&&&&&&&&&&&&& Q524R&&&&&&&&&&&&&& Q421R&&&&&&&&&&&&&& Q62;R&&&&&&&&&&&&&& Q1321R&&&&&&&&&&&&]"/G&!+,)&E+*# J&&&&&&&&&&&&&&& 1<24&&&&&&&&&&&&& 542<&&&&&&&&&&&&& ;>2;&&&&&&&&&&&&& 11=2<&&&&&&&&&&& 1<A24&&&&&&&&&&& 1<624&&&&&&&&&&&!"#$%&E+*# J&&&&&&&&&&&&&&& 1<24&&&&&&&&&&&&& 542<&&&&&&&&&&&&& ;>2;&&&&&&&&&&&&& 11=2<&&&&&&&&&&& 1<A24&&&&&&&&&&& 1<624&&&&&&&&&&&!"#$%&F00+#0 ;21&&&&&&&&&&&&&&&& <625&&&&&&&&&&&&& 4>24&&&&&&&&&&&&& 1<<23&&&&&&&&&&& 54A23&&&&&&&&&&& <6<24&&&&&&&&&&& >=621&&&&&&&&&&&EHZ <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&&D/8+/#",V&!(,/0 <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&& <;24&&&&&&&&&&&&&N@[+M&F00+#&!(,/0 <A6235&&&&&&&&& <4=2;3&&&&&&&&& <4521A&&&&&&&&& <><25<&&&&&&&&& <<A2<A&&&&&&&&& <<=211&&&&&&&&& <<62>;&&&&&&&&&O$0I&OVK%+ 325&&&&&&&&&&&&&&&& 325&&&&&&&&&&&&&&&& 12<&&&&&&&&&&&&&&&& 12<&&&&&&&&&&&&&&&& 12<&&&&&&&&&&&&&&&& 12<&&&&&&&&&&&&&&&& 12<&&&&&&&&&&&&&&&&

Annual!Change,!Turns! 2010E 2011E 2012E 2013E 2014E 2015E 2016E7+8+/(+0 >3323: 13323: 14323: 13323: 4323: <<2<:?,"00&T$,G@/ 323: 323: 323: 323: 323: 323:Z9+,$#@/G&T$,G@/ 323: 323: 323: 323: 323: 323:'+#&T$,G@/ <<2A: J1523: J152;: J<23: J42<: J12>:B.H&J&E@%(#+M 4;A24: 6;21: 11=2>: A>23: >523: <124:BCD!EF >3323: 13323: 14323: 13323: 4323: <<2<:N,++&O$0I&N%"P J4>2A: 5A>21: 6324: J52<: J1<>2=: 54523:O$0I <=1<2;: J;426: 1>>23: 14<21: 1<423: 11523:S",X@/G&O$9@#$% 53A2;: JA121: 14323: 13323: 4323: <<2<:]"/G&!+,)&E+*# 323: =62=: 14423: =<23: 162A: J12>:!"#$%&E+*# 323: =62=: 14423: =<23: 162A: J12>:!"#$%&F00+#0 43=2<: >;2<: 1>>25: A>2=: >>25: <32>:EHZ 323: 323: 323: 323: 323: 323:D/8+/#",V&!(,/0 323: 323: 323: 323: 323: 323:N@[+M&F00+#&!(,/0 JA26: J12=: J524: J121: J32>: J325:O$0I&OVK%+ <42<: 43A2A: 323: 323: 323: 323:



CONCLUSION Novo Energies is an exciting alternative energy company. The Company’s core business of converting waste materials such as plastic and tire to liquid fuels utilizing a suite of proprietary technologies targets significant corporate growth. The Company has a robust business model built on multiple sources of revenues and positive energy conversion economics. Along with a majority revenues from oil and liquid fuel sales, the top-line should benefit from income from sale of by-products. Further, the Company plans to use a combination of gasification and thermolysis technologies, resulting in better conversion economics. This in our view is a unique business model as it allows the Company to become a low cost producer of alternative energies. The alternative energy industry is expected to expand to over $40 billion in the next couple of years. We expect significant growth potential for the Company’s products, especially after the Company acquires an equity partner to support its expansion plans. Revenues are expected to grow from $5.7 million for Fiscal Year End (FYE) December 31, 2009 to more than $570.0 million by FYE 2015. The Company will have to acquire considerable funding to meet our projections. We believe the Company’s strong management team, robust revenue streams and growth potential in its marketplace makes the stock a potential valuable investment proposition. The Company will have to raise funds to meet our projections. Novo Energies provides an exciting long term investment opportunity.

RS/Grass Roots Distribution Research



LATEST PRESS RELEASE Atlantic Wine Agencies, Inc. (to Be Known as Novo Energies Corporation) Appoints New President and Chief Operations Officer

NEW YORK, NY -- (Marketwire) -- 05/08/09 -- Atlantic Wine Agencies, Inc. (OTCBB: AWIN), a publicly traded Company listed on the Over the Counter Market (OTCBB) under the symbol "AWIN," announced today that: (i) it has begun taking the necessary steps to change its name to Novo Energies Corporation and (ii) Mr. Andre L'Heureux has been appointed as our new President and Chief Operations Officer effective today.

Mr. L'Heureux has over 25 years of experience in the chemical and biotechnological sector. He will be responsible for the planning, implementation and production of Novo Energies' first operating plastics and synthetic tire depolymerization plants in Quebec, Canada, the first such plant in Quebec. Novo Energies has developed a proprietary waste to liquid renewable energy solution.

Previously, Mr. L'Heureux was the President of Chemco Inc., a private chemical company for industrial water treatment products. Mr. L'Heureux has been a researcher in the development of polymer and biopolymer products. In 1984, he finished his studies as mechanical technologist from Limoilou College. Mr. L'Heureux continued his studies in the field of business administration at the University of Quebec.

Novo Energies Corporation Chairman and Chief Executive Officer Antonio Treminio stated: "It is a pleasure to have Mr. Andre L'Heureux join our management team. Andre's extensive experience in the field, vision and 'can do' attitude will help us build a world-class business providing an alternative and effective solution to the global energy crises."

Mr. Andre L'Heureux commented: "It is with great pleasure that I accept these responsibilities and look forward to working with the current management team to meet our objectives in the most efficient and effective way possible. We are currently facing a global crises where our natural resources are been constantly depleted and unless we act today and start implementing new renewable solutions, our future generations and ourselves may face irreversible consequences affecting our natural environment."

More information will be provided as the Company progresses with its developments.

About Atlantic Wine Agencies, Inc. (to be known as Novo Energies Corporation) is a public company trading on the Over the Counter Bulletin Board Market ("OTCBB") headquartered in New York. The Company's new mission is to continue expanding within the renewable energy sector by developing and implementing renewable energy solutions while maintaining its commitment to conserve energy, natural resources and help reduce pollutants and unwanted biological agents.



FINANCIAL EXHIBITS

Income Statement – Base Case

all!figures!in!$!million 2010E 2011E 2012E 2013E 2014E 2015E 2016ERevenues 5.7!!!!!!!!!!!!!!! 28.5!!!!!!!!!!!! 57.0!!!!!!!!!!!! 142.5!!!!!!!!!! 285.0!!!!!!!!!! 427.5!!!!!!!!!! 570.0!!!!!!!!!!O"0#&"-&?""M0&H"%M 12>&&&&&&&&&&&&&&&& 621&&&&&&&&&&&&&&&& 1>2<&&&&&&&&&&&&& <42;&&&&&&&&&&&&& 612<&&&&&&&&&&&&& 13;2A&&&&&&&&&&& 1>524&&&&&&&&&&&Gross!Profit 4.3!!!!!!!!!!!!!!! 21.4!!!!!!!!!!!! 42.8!!!!!!!!!!!! 106.9!!!!!!!!!! 213.8!!!!!!!!!! 320.6!!!!!!!!!! 427.5!!!!!!!!!!

H+%%@/G&$/M&FM)@/&B[9+/0+0 12A&&&&&&&&&&&&&&&& A26&&&&&&&&&&&&&&&& 1A2<&&&&&&&&&&&&& >=2<&&&&&&&&&&&&& A;24&&&&&&&&&&&&& 1>>2=&&&&&&&&&&& 1A<23&&&&&&&&&&&Operating!Profit/!EBITDA 2.3!!!!!!!!!!!!!!! 11.7!!!!!!!!!!!! 23.5!!!!!!!!!!!! 58.6!!!!!!!!!!!! 117.3!!!!!!!!!! 175.9!!!!!!!!!! 234.5!!!!!!!!!!

E+9,+K@$#@"/&$/M&F)",#@_$#@"/ 125&&&&&&&&&&&&&&&& <2>&&&&&&&&&&&&&&&& =2<&&&&&&&&&&&&&&&& 1=2A&&&&&&&&&&&&& <A2A&&&&&&&&&&&&& ;;21&&&&&&&&&&&&& A52<&&&&&&&&&&&&&EBIT 1.1!!!!!!!!!!!!!!! 8.3!!!!!!!!!!!!!!! 15.2!!!!!!!!!!!! 39.7!!!!!!!!!!!! 77.4!!!!!!!!!!!! 109.8!!!!!!!!!! 142.2!!!!!!!!!!

D/#+,+0#&B[9+/0+U&'+# J&&&&&&&&&&&&&&& 324&&&&&&&&&&&&&&&& 12>&&&&&&&&&&&&&&&& <21&&&&&&&&&&&&&&&& ;2>&&&&&&&&&&&&&&&& A23&&&&&&&&&&&&&&&& A26&&&&&&&&&&&&&&&&Z#I+,&D/K")+&QB[9+/0+0R J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&&EBT 1.1!!!!!!!!!!!!!!! 7.8!!!!!!!!!!!!!!! 13.8!!!!!!!!!!!! 36.6!!!!!!!!!!!! 70.9!!!!!!!!!!!! 100.8!!!!!!!!!! 132.5!!!!!!!!!!

.,"8@0@"/&-",&!$[$#@"/ 321&&&&&&&&&&&&&&&& 125&&&&&&&&&&&&&&&& 521&&&&&&&&&&&&&&&& 1123&&&&&&&&&&&&& 512<&&&&&&&&&&&&& <325&&&&&&&&&&&&& <A2=&&&&&&&&&&&&&Net!Profit 1.0!!!!!!!!!!!!!!! 6.7!!!!!!!!!!!!!!! 11.7!!!!!!!!!!!! 25.6!!!!!!!!!!!! 49.7!!!!!!!!!!!! 70.5!!!!!!!!!!!! 92.8!!!!!!!!!!!!

HI$,+0&Z(#0#$/M@/G&J&C$0@K >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&&HI$,+0&Z(#0#$/M@/G&J&E@%(#+M >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&& >>26&&&&&&&&&&&&&

B.H&J&C$0@K 32355&&&&&&&&&&& 321>A&&&&&&&&&&& 325;5&&&&&&&&&&& 3246<&&&&&&&&&&& 12111&&&&&&&&&&& 1246=&&&&&&&&&&& 52364&&&&&&&&&&&B.H&J&E@%(#+M 32355&&&&&&&&&&& 321>A&&&&&&&&&&& 325;5&&&&&&&&&&& 3246<&&&&&&&&&&& 12111&&&&&&&&&&& 1246=&&&&&&&&&&& 52364&&&&&&&&&&&



Balance Sheet – Base Case

Cash Flow Statement – Base Case

all!figures!in!$!million 2010E 2011E 2012E 2013E 2014E 2015E 2016EASSETSO$0I 325&&&&&&&&&&&&&&&& A2<&&&&&&&&&&&&&&&& <25&&&&&&&&&&&&&&&& 62=&&&&&&&&&&&&&&&& 1A26&&&&&&&&&&&&& >;25&&&&&&&&&&&&& A62A&&&&&&&&&&&&&D/8+/#",V 321&&&&&&&&&&&&&&&& 326&&&&&&&&&&&&&&&& 12>&&&&&&&&&&&&&&&& <2;&&&&&&&&&&&&&&&& 621&&&&&&&&&&&&&&&& 1326&&&&&&&&&&&&& 1>2<&&&&&&&&&&&&&FKK"(/#&7+K+@8$*%+0 32;&&&&&&&&&&&&&&&& 52A&&&&&&&&&&&&&&&& 426&&&&&&&&&&&&&&&& 1>2<&&&&&&&&&&&&& 5=24&&&&&&&&&&&&& >52=&&&&&&&&&&&&& 4623&&&&&&&&&&&&&Z#I+,&O(,,+/#&F00+#0 321&&&&&&&&&&&&&&&& 324&&&&&&&&&&&&&&&& 123&&&&&&&&&&&&&&&& 52>&&&&&&&&&&&&&&&& >2=&&&&&&&&&&&&&&&& 625&&&&&&&&&&&&&&&& A26&&&&&&&&&&&&&&&&Total!Current!Assets 1.0!!!!!!!!!!!!!!! 13.3!!!!!!!!!!!! 11.3!!!!!!!!!!!! 28.0!!!!!!!!!!!! 60.1!!!!!!!!!!!! 106.9!!!!!!!!!! 178.8!!!!!!!!!!

.,"9+,#VU&.%$/#&$/M&B\(@9)+/#U&?,"00 ;25&&&&&&&&&&&&&&&& 5=23&&&&&&&&&&&&& 4423&&&&&&&&&&&&& 1<>23&&&&&&&&&&& 5;423&&&&&&&&&&& <A;23&&&&&&&&&&& 45623&&&&&&&&&&&

.,"9+,#VU&.%$/#&$/M&B\(@9)+/#U&'+# 423&&&&&&&&&&&&&&&& 5<2<&&&&&&&&&&&&& >523&&&&&&&&&&&&& 13521&&&&&&&&&&& 1A<25&&&&&&&&&&& 54=21&&&&&&&&&&& 5A;2=&&&&&&&&&&&N@/$/K@/G&N++0&%+00&FKK2&F)",#@_$#@"/ J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&&Z#I+,0 321&&&&&&&&&&&&&&&& 32;&&&&&&&&&&&&&&&& 121&&&&&&&&&&&&&&&& 52A&&&&&&&&&&&&&&&& 426&&&&&&&&&&&&&&&& =2;&&&&&&&&&&&&&&&& 112>&&&&&&&&&&&&&Total!Assets 6.1!!!!!!!!!!!!!!! 37.2!!!!!!!!!!!! 54.5!!!!!!!!!!!! 133.0!!!!!!!!!! 259.0!!!!!!!!!! 373.5!!!!!!!!!! 487.1!!!!!!!!!!

LIABILITIESFKK"(/#0&.$V$*%+ <24&&&&&&&&&&&&&&&& 1<23&&&&&&&&&&&&& >2<&&&&&&&&&&&&&&&& 1326&&&&&&&&&&&&& 512>&&&&&&&&&&&&& <521&&&&&&&&&&&&& >52=&&&&&&&&&&&&&FKK,(+M&B[9+/0+0 325&&&&&&&&&&&&&&&& 123&&&&&&&&&&&&&&&& 12A&&&&&&&&&&&&&&&& >2=&&&&&&&&&&&&&&&& A26&&&&&&&&&&&&&&&& 1>24&&&&&&&&&&&&& 1A2<&&&&&&&&&&&&&Z#I+,0 32=&&&&&&&&&&&&&&&& 12>&&&&&&&&&&&&&&&& 52A&&&&&&&&&&&&&&&& 625&&&&&&&&&&&&&&&& 1>24&&&&&&&&&&&&& 5126&&&&&&&&&&&&& 5A23&&&&&&&&&&&&&Total!Current!Liabilities 4.5!!!!!!!!!!!!!!! 15.5!!!!!!!!!!!! 9.1!!!!!!!!!!!!!!! 22.8!!!!!!!!!!!! 45.5!!!!!!!!!!!! 68.3!!!!!!!!!!!! 91.0!!!!!!!!!!!!

]"/GJ!+,)&E+*# J&&&&&&&&&&&&&&& 1<24&&&&&&&&&&&&& 542<&&&&&&&&&&&&& ;>2;&&&&&&&&&&&&& 11=2<&&&&&&&&&&& 1<A24&&&&&&&&&&& 1<624&&&&&&&&&&&Total!Liabilities 4.5!!!!!!!!!!!!!!! 28.9!!!!!!!!!!!! 34.4!!!!!!!!!!!! 87.4!!!!!!!!!!!! 163.8!!!!!!!!!! 207.7!!!!!!!!!! 228.5!!!!!!!!!!

O"))"/&H#"KX 323&&&&&&&&&&&&&&&& 323&&&&&&&&&&&&&&&& 323&&&&&&&&&&&&&&&& 323&&&&&&&&&&&&&&&& 323&&&&&&&&&&&&&&&& 323&&&&&&&&&&&&&&&& 323&&&&&&&&&&&&&&&&.,+-+,,+M&H#"KX J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&&FMM@#@"/$%&.$@M&@/&O$9@#$% 1;2>&&&&&&&&&&&&& 1;2>&&&&&&&&&&&&& 1;2>&&&&&&&&&&&&& 1;2>&&&&&&&&&&&&& 1;2>&&&&&&&&&&&&& 1;2>&&&&&&&&&&&&& 1;2>&&&&&&&&&&&&&7+#$@/+M&B$,/@/G0 Q1>2=R&&&&&&&&&&&& Q=21R&&&&&&&&&&&&&& <2;&&&&&&&&&&&&&&&& 5A25&&&&&&&&&&&&& 6=2=&&&&&&&&&&&&& 1>A2>&&&&&&&&&&& 5>521&&&&&&&&&&&Total!Shareholders!Equity! 1.6!!!!!!!!!!!!!!! 8.3!!!!!!!!!!!!!!! 20.0!!!!!!!!!!!! 45.6!!!!!!!!!!!! 95.3!!!!!!!!!!!! 165.8!!!!!!!!!! 258.6!!!!!!!!!!Total!Liabilities,!Shareholders!Equity,!MI 6.1!!!!!!!!!!!!!!! 37.2!!!!!!!!!!!! 54.5!!!!!!!!!!!! 133.0!!!!!!!!!! 259.0!!!!!!!!!! 373.5!!!!!!!!!! 487.0!!!!!!!!!!

all!figures!in!$!million 2010E 2011E 2012E 2013E 2014E 2015E 2016EOperating!Activity'+#&D/K")+ 123&&&&&&&&&&&&&&&& ;26&&&&&&&&&&&&&&&& 1126&&&&&&&&&&&&& 542;&&&&&&&&&&&&& >A26&&&&&&&&&&&&& 6324&&&&&&&&&&&&& A52=&&&&&&&&&&&&&FMM^&E+9,+K@$#@"/&$/M&F)",#@_$#@"/ 125&&&&&&&&&&&&&&&& <2>&&&&&&&&&&&&&&&& =2<&&&&&&&&&&&&&&&& 1=2A&&&&&&&&&&&&& <A2A&&&&&&&&&&&&& ;;21&&&&&&&&&&&&& A52<&&&&&&&&&&&&&]+00^&OI$/G+&@/&S",X@/G&O$9@#$% Q<26R&&&&&&&&&&&&&& 626&&&&&&&&&&&&&&&& Q132>R&&&&&&&&&&&& 124&&&&&&&&&&&&&&&& 524&&&&&&&&&&&&&&&& 524&&&&&&&&&&&&&&&& 524&&&&&&&&&&&&&&&&Cash!Flow!from!Operating!Activities (1.4)!!!!!!!!!!!!! 17.8!!!!!!!!!!!! 9.6!!!!!!!!!!!!!!! 46.0!!!!!!!!!!!! 92.1!!!!!!!!!!!! 139.2!!!!!!!!!! 187.6!!!!!!!!!!

Investing!ActivityD/8+0#)+/#&@/&..LB Q;25R&&&&&&&&&&&&&& Q512=R&&&&&&&&&&&& Q5623R&&&&&&&&&&&& Q6A23R&&&&&&&&&&&& Q1<123R&&&&&&&&& Q1<123R&&&&&&&&& Q1<123R&&&&&&&&&FK\(@0@#@"/0 J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&&Z#I+,&D/8+0#@/G&O$0I&D/-%"P&`&Z(#-%"P Q321R&&&&&&&&&&&&&& Q324R&&&&&&&&&&&&&& Q32;R&&&&&&&&&&&&&& Q126R&&&&&&&&&&&&&& Q52AR&&&&&&&&&&&&&& Q52AR&&&&&&&&&&&&&& Q52AR&&&&&&&&&&&&&&Cash!Flow!from!Investing!Activities (6.3)!!!!!!!!!!!!! (22.3)!!!!!!!!!!! (27.6)!!!!!!!!!!! (80.7)!!!!!!!!!!! (133.9)!!!!!!!! (133.9)!!!!!!!! (133.9)!!!!!!!!

Financing!ActivityD/K,+$0+&QE+K,+$0+R&@/&E+*# J&&&&&&&&&&&&&&& 1<24&&&&&&&&&&&&& 112A&&&&&&&&&&&&& <A2<&&&&&&&&&&&&& 4<26&&&&&&&&&&&&& 5125&&&&&&&&&&&&& Q523R&&&&&&&&&&&&&&D/K,+$0+&QE+K,+$0+R&@/&B\(@#V =23&&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&& J&&&&&&&&&&&&&&&Cash!Flow!from!Financing!Activities 8.0!!!!!!!!!!!!!!! 13.5!!!!!!!!!!!! 11.9!!!!!!!!!!!! 39.3!!!!!!!!!!!! 53.7!!!!!!!!!!!! 21.2!!!!!!!!!!!! (2.0)!!!!!!!!!!!!!

'+#&OI$/G+&@/&O$0I 0.2!!!!!!!!!!!!!!! 9.0!!!!!!!!!!!!!!! (6.1)!!!!!!!!!!!!! 4.6!!!!!!!!!!!!!!! 11.9!!!!!!!!!!!! 26.5!!!!!!!!!!!! 51.7!!!!!!!!!!!!Opening!Cash!Balance "!!!!!!!!!!!!!!! 0.2!!!!!!!!!!!!!!! 9.3!!!!!!!!!!!!!!! 3.2!!!!!!!!!!!!!!! 7.8!!!!!!!!!!!!!!! 19.7!!!!!!!!!!!! 46.2!!!!!!!!!!!!Ending!Cash!Balance 0.2!!!!!!!!!!!!!!! 9.3!!!!!!!!!!!!!!! 3.2!!!!!!!!!!!!!!! 7.8!!!!!!!!!!!!!!! 19.7!!!!!!!!!!!! 46.2!!!!!!!!!!!! 97.9!!!!!!!!!!!!



Financial Summary – Base Case

Sales!Matrics 2010E 2011E 2012E 2013E 2014E 2015E 2016EH?F&`&H$%+0&Q:R <<2A: <<2A: <<2A: <<2A: <<2A: <<2A: <<2A:7+K+@8$*%+0&`&H$%+0&Q:R 1323: 1323: 1323: 1323: 1323: 1323: 1323:D/8+/#",V&`&H$%+0&Q:R 524: 524: 524: 524: 524: 524: 524:H$%+0&9+,&E"%%$,&"-&D/8+/#",V >323 >323 >323 >323 >323 >323 >323H$%+0&9+,&E"%%$,&"-&'+#&.%$/# 121 125 12> 12> 124 126 12A7+K+@8$*%+0&9+,&M$V&"-&H$%+0 <;24&&&&&&&&&& <;24&&&&&&&&&& <;24&&&&&&&&&& <;24&&&&&&&&&& <;24&&&&&&&&&& <;24&&&&&&&&& <;24&&&&&&&&&

Profitability!Metrics 2010E 2011E 2012E 2013E 2014E 2015E 2016E?,"00&.,"-@#&T$,G@/ 6423: 6423: 6423: 6423: 6423: 6423: 6423:.,+&!$[&.,"-@#&T$,G@/ 1A2>: 5624: 5>25: 5426: 5>2A: 5<2;: 5<25:'+#&.,"-@#&T$,G@/ 162>: 5<2>: 532;: 1=23: 162>: 1;24: 1;2<:.$V"(#&7$#@" 323: 323: 323: 323: 323: 323: 323:D/#+,+0#&O"8+,$G+ /2$2 1;2;&&&&&&&&&& 1321&&&&&&&&&& 112;&&&&&&&&&& 1121&&&&&&&&&& 1125&&&&&&&&& 1<26&&&&&&&&&!$[&7$#+ 13: 14: 14: <3: <3: <3: <3:

Performance!Metrics 2010E 2011E 2012E 2013E 2014E 2015E 2016E7+#(,/&"/&B\(@#V&Q7ZBR ;121: =32>: 4=2;: 4;21: 4521: >524: <42A:7+#(,/&"/&F00+#0&Q7ZFR <=2<: <124: ><21: >>21: >42<: >621: >=21:7+#(,/&"/&D/8+0#+M&O$9@#$%&Q7ZDR 1>>25: 4<2=: 4126: 4<25: 4>2A: 462;: 4A25:

Efficiency!Metrics 2010E 2011E 2012E 2013E 2014E 2015E 2016E7+K+@8$*%+&!(,/"8+, 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&& 1323&&&&&&&&&D/8+/#",V&!(,/"8+, 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&&& 1323&&&&&&&&& 1323&&&&&&&&&!"#$%&F00+#&!(,/"8+, 32A&&&&&&&&&&&& 32=&&&&&&&&&&&&& 123&&&&&&&&&&&&& 121&&&&&&&&&&&&& 121&&&&&&&&&&&&& 121&&&&&&&&&&&& 125&&&&&&&&&&&&E$V0&"-&OZ?H&@/&D/8+/#",V J&&&&&&&&&&& J&&&&&&&&&&&& J&&&&&&&&&&&& J&&&&&&&&&&&& J&&&&&&&&&&&& J&&&&&&&&&&& J&&&&&&&&&&&

Per!Share!Data 2010E 2011E 2012E 2013E 2014E 2015E 2016EH$%+0&9+,&HI$,+ 321<&&&&&&&&&& 32;>&&&&&&&&&& 125=&&&&&&&&&& <21A&&&&&&&&&& ;2<=&&&&&&&&&& A24;&&&&&&&&& 15264&&&&&&&O$0I&J&9+,&HI$,+ 3231&&&&&&&&&& 3251&&&&&&&&&& 3236&&&&&&&&&& 3216&&&&&&&&&& 32>>&&&&&&&&&& 123<&&&&&&&&& 521A&&&&&&&&&O(,,+/#&F00+#0&9+,&HI$,+ 3235&&&&&&&&&& 32<3&&&&&&&&&& 3254&&&&&&&&&& 32;<&&&&&&&&&& 12<>&&&&&&&&&& 52<A&&&&&&&&& >233&&&&&&&&&!"#$%&F00+#0&9+,&HI$,+ 321>&&&&&&&&&& 32=<&&&&&&&&&& 1255&&&&&&&&&& 52A6&&&&&&&&&& 42=3&&&&&&&&&& =2<;&&&&&&&&& 132A3&&&&&&&!$/G@*%+&C""X&Y$%(+&9+,&HI$,+ 323>&&&&&&&&&& 321A&&&&&&&&&& 32>4&&&&&&&&&& 1235&&&&&&&&&& 521<&&&&&&&&&& <261&&&&&&&&& 426=&&&&&&&&&]"/G&!+,)&E+*#&J&9+,&HI$,+ J&&&&&&&&&&& 32<3&&&&&&&&&& 3246&&&&&&&&&& 12>4&&&&&&&&&& 52;4&&&&&&&&&& <215&&&&&&&&& <23=&&&&&&&&&S",X@/G&O$9@#$%&9+,&HI$,+ Q323=R&&&&&&&& Q325;R&&&&&&&&& Q3235R&&&&&&&&& Q323;R&&&&&&&&& Q3211R&&&&&&&&& Q3216R&&&&&&&& Q325<R&&&&&&&&N,++&O$0I&N%"P&9+,&HI$,+ Q321>R&&&&&&&& Q323;R&&&&&&&&& Q3254R&&&&&&&&& Q32><R&&&&&&&&& Q32>5R&&&&&&&&& 3214&&&&&&&&& 3245&&&&&&&&&

Price/!Earnings 2010E 2011E 2012E 2013E 2014E 2015E 2016E.,@K+&B$,/@/G0&7$#@"&J&O%"0@/G&.,@K+ A23&&&&&&&&&&&& 12<&&&&&&&&&&&&& 32=&&&&&&&&&&&&& 32<&&&&&&&&&&&&& 325&&&&&&&&&&&&& 321&&&&&&&&&&&& 321&&&&&&&&&&&&.,@K+&#"&O$0I&B$,/@/G0 >23&&&&&&&&&&&& 32A&&&&&&&&&&&&& 32>&&&&&&&&&&&&& 325&&&&&&&&&&&&& 321&&&&&&&&&&&&& 321&&&&&&&&&&&& 323&&&&&&&&&&&&

Valuation!Metrics 2010E 2011E 2012E 2013E 2014E 2015E 2016E.,@K+&#"&H$%+0 12;&&&&&&&&&&&& 32<&&&&&&&&&&&&& 325&&&&&&&&&&&&& 321&&&&&&&&&&&&& 323&&&&&&&&&&&&& 323&&&&&&&&&&&& 323&&&&&&&&&&&&.,@K+&#"&!$/G@*%+&C""X&Y$%(+&J&7$#@" 424&&&&&&&&&&&& 121&&&&&&&&&&&&& 32>&&&&&&&&&&&&& 325&&&&&&&&&&&&& 321&&&&&&&&&&&&& 321&&&&&&&&&&&& 323&&&&&&&&&&&&.,@K+&#"&O$0I&N%"P&J&7$#@" Q;25R&&&&&&&&&& 324&&&&&&&&&&&&& 32A&&&&&&&&&&&&& 325&&&&&&&&&&&&& 321&&&&&&&&&&&&& 321&&&&&&&&&&&& 323&&&&&&&&&&&&.,@K+&#"&N,++&O$0I&N%"P&J&7$#@" Q125R&&&&&&&&&& Q524R&&&&&&&&&&& Q32;R&&&&&&&&&&& Q32<R&&&&&&&&&&& Q32<R&&&&&&&&&&& 32;&&&&&&&&&&&& 321&&&&&&&&&&&&.,@K+&#"&B\(@#V 424&&&&&&&&&&&& 121&&&&&&&&&&&&& 32>&&&&&&&&&&&&& 325&&&&&&&&&&&&& 321&&&&&&&&&&&&& 321&&&&&&&&&&&& 323&&&&&&&&&&&&



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GRRD cautions all investors that such forward-looking statements in this report/release/advertisement are not guarantees of future performance. Unknown risk, including bankruptcy, uncertainties, fraud, stock manipulation as well as other uncontrollable or unknown factors may cause actual results to materially differ from the results, performance or expectations expressed or implied by such forward-looking statements. Smaller companies may have a higher likelihood of filing for bankruptcy. Investors are urged to do their own research regarding the dangers of a potential bankruptcy filing. The enclosed researched company may have to raise additional capital to remain solvent and to meet forecasted valuation and price projections in this report/release/advertisement. Investor awareness distribution programs can materially affect the price of the company’s stock. When used, the words "anticipate," "believe," "estimate," "expect," and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements. The Company's actual results, performance or achievements could differ materially from the results expressed in, or implied by these forward looking statements. Further management discussion of risks and uncertainties can be found in the Company's quarterly filing with the Securities Exchange Commission and other periodic SEC filings. Readers hereby acknowledge that any reliance upon any materials shall be at the reader's sole risk. GRRD distributes its research reports through the research distribution



network available to research firms, and by investor awareness advertising programs to various types of investors. Recipients of such distribution may be short term investors such as day traders, traders, retail investors, institutions, and/or long term risk adverse retail and institutional investors. GRRD reserves the right, in its sole discretion, at any time, and without any obligation, to make improvements to, or correct any error or omission(s) in any portion of the service or the materials. The service and the materials are provided by GRRD on an 'as is' basis. GRRD expressly disclaims any and all warranties, express or implied, including without limitation warranties or merchantability and fitness for a particular purpose, with respect to the service or any materials and products. This report/release/advertisement has been prepared in accordance with the SEC’s rules and amendments, Oct 23, 2000, regarding 17 CFR Parts, 240, 243 and 249, (Selective Disclosure and Insider Trading), Regulation FD (Fair Disclosure), 10b5-1, 10b5-2, NASD Rules 2250, 2420, 2710 and 2711 and the Can-Spam Act of 2003. GRRD is sometimes paid in cash, stock, warrants, options or other securities in lieu of or in addition to GRRD ’s stated compensation schedule. GRRD has been compensated $7,500 for this report/release/advertisement. This document shall not be copied nor reproduced in any form without the expressed written and authorized consent of GRRD. Copyright: Grass Roots Research and Distribution, Inc. (www.GrassRootsRD.com), D. Paul Cohen

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