thermal energy international - june 2014

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1 A more sustainable future... Today! TSX-V: TMG | Corporate Presentation | June 2014

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Corporate presentation for Thermal Energy International (TSX-V: TMG) - a global provider of proprietary and proven energy efficiency solutions. Thermal Energy helps industrial, commercial and institutional operations worldwide save money and improve their bottom lines by reducing their fuel use and cutting their carbon emissions.

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Page 1: Thermal Energy International - June 2014

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A more sustainable future... Today!

TSX-V: TMG | Corporate Presentation | June 2014

Page 2: Thermal Energy International - June 2014

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Forward looking statements

Certain written and oral statements included in this presentation constitute “forward-looking information”. For example, statements about the opportunities for repeat business, additional orders, entry into new markets and growth of recurring revenue streams; energy savings and payback period experienced by customers; growth of pipeline, order backlog; introduction of new products and services and growth opportunities and strategies are all forward looking information. Such forward looking information reflects Thermal Energy International’s current expectations with respect to future events and are based on information currently available to management. Forward-looking information involves significant known and unknown risks, uncertainties and assumptions. Many factors could cause actual results, performance or achievements to be materially different from those that may be expressed or implied by such forward-looking information. Fulfillment of orders, installation and activation of product could all be delayed for a number of reasons, some of which are outside of the company’s control, which would result in anticipated revenues from such projects being delayed or in the most serious cases eliminated. Orders in the company’s backlog may not turn into revenue due to many factors, some of which are outside of the company’s control, including but not limited to the company’s ability to deliver products on time and in accordance with specifications and the continuing financial viability of the customer. Introduction of new products and services, entry into new markets, repeat business and growth opportunities will all be subject to company resources and market acceptance and may not be achieved as anticipated by the company or at all. Information as to amount of heat recovered, energy savings and payback period associated with Thermal Energy International’s products are based on Thermal Energy International’s own testing and average customer results to date. Actual results of Thermal Energy International’s products will vary by installation. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking information contained in this presentation. Readers should not place undue reliance on forward-looking information. The forward-looking information is made as of the date of this presentation and Thermal Energy International does not assume any obligation to update or revise it to reflect new events or circumstances, except as required by law.

Page 3: Thermal Energy International - June 2014

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Thermal Energy is a…

Global provider of energy efficiency & emission reduction solutions to the ICI sectors

We save our customers money & improve their bottom lines by…

Reducing their fuel use and cutting carbon emissions

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Page 4: Thermal Energy International - June 2014

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Highlights

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Large, fast growing global market with

strong fundamentals

Proprietary & proven energy efficiency

solutions provide high ROI

Strong track record of growth

4 Growing global footprint

Page 5: Thermal Energy International - June 2014

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Large, fast-growing market

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North American market

>$90B1

>$450B1

Global investment in energy efficiency grew 15% to $3.9B in 2013

Global market

Source: Pew Charitable Trusts, April 2014 1 Calculations based on data from U.S. Dept. of Energy, 2012 Energy Outlook

Page 6: Thermal Energy International - June 2014

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Strong market fundamentals

56% growth in global energy consumption expected 2010 - 20401

60% of all energy used is lost due to inefficiency

1 U.S. EIA, International Energy Outlook 2013

Energy efficiency represents significant cost reduction opportunities

Investment more than offset by energy savings

Page 7: Thermal Energy International - June 2014

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FLU-ACE®

Direct contact condensing heat recovery

GEM® Condensate return systems (steam trap)

~80% We can recover of energy lost in typical boiler plant and steam system operations High ROI with short, compelling payback 16 year track record

Proprietary, proven solutions

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Page 8: Thermal Energy International - June 2014

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FLU-ACE® heat recovery

– Recovery of waste heat from process exhaust

– Return hot water for use in production or heating

– 1 system per location – sells for $100k to millions each

37 Worldwide Installations

90% 10-30% 2-5 YEARS Recovery rate Reduction in

energy costs Payback period Hot

Air

Cool Air

Cool Water

Hot Water

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GEM® steam trap

– Condensate return system

– Reduce steam loss & improve efficiency vs. traditional mechanical steam traps

– No moving parts – never needs replacing

– 100’s to 1,000’s of traps per location and sell for $500 to $1,000 per trap

65,000 Traps installed worldwide

10-30% 1-2 year Reduction in energy costs

Payback period

Page 10: Thermal Energy International - June 2014

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Proven across a number of industries

Pharmaceutical 8 customers with 42 of >350 sites penetrated

Food & Beverage 16 customers with 50 of >1,600 sites penetrated

Hospitals >25 different hospitals

Pulp & Paper 11 customers with >40 of 500+ sites penetrated

Chemical / Petrochemical

11 customers with 18 of >500 sites penetrated

Significant repeat business

Our success so far

Page 11: Thermal Energy International - June 2014

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June 3, 2013:

$3.6 million heat recovery project

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Strength in pulp & paper industry

>$17 million in heat recovery and GEM® business from multiple customers since 2006

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Page 12: Thermal Energy International - June 2014

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Sept./Oct. 2013:

$1.9 million in heat recovery & GEM® orders from leading Fortune 500 food & beverage company

Repeat business in food & beverage

Working towards additional heat recovery and GEM® orders at multiple sites with the same customer

7 orders to date

Page 13: Thermal Energy International - June 2014

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Cross selling to hospitals

November 14, 2013:

$1.2 million heat recovery order from a major hospital

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>$3.0 million in heat recovery & GEM® orders from major hospitals FY 2014 YTD

Page 14: Thermal Energy International - June 2014

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Our impact to date

> $398 Million Total fuel savings for our customers at $5/MMBtu

3.9M Tonnes Reduction of greenhouse gas emissions

Page 15: Thermal Energy International - June 2014

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Annual energy savings

49,282 149

The energy used by: The energy generated by:

North American homes wind turbines with a capacity of 289 MW1

1 Estimated current cost of ~$500M

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Multinational management team

International sales team (representation in 28

countries)

Extensive list of multinational customers

Growing global footprint

Page 17: Thermal Energy International - June 2014

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Growing salesforce

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8

2011

17

Small, self-sufficient distributors

Sales & marketing staff

Small, self-sufficient distributors

Sales & marketing staff

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Larger professional multi-line distributors

Today

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6 new sales & marketing staff added in the last 6 months Actively looking for 3 additional sales & marketing staff

Page 18: Thermal Energy International - June 2014

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Ranked 36th

5-year revenue growth of

1,502%

Strong track record of growth

(2007 to 2012)

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Page 19: Thermal Energy International - June 2014

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A challenging fiscal 2013

($000’s) FY 2013 FY 2012

Revenue 8,210 13,152

Gross profit 4,977 5,648

Net income (loss) (2,825) 101

Operating cash flow

(1,244) 903

FY 2013 impacted by:

$2.3M non-cash charge for goodwill impairment related to GEM® business

Temporary delay of major heat recovery projects

Maturation of 2 large GEM® accounts

Page 20: Thermal Energy International - June 2014

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Return to growth in fiscal 2014

YTD Highlights:

Heat recovery sales up ~$1.5M

GEM® sales up >$0.6M

Received largest GEM® order to date

9 Months FY 2013

12 Months FY 2013

9 Months FY 2014

$6.3M

$8.2M $8.4M

Revenue

Page 21: Thermal Energy International - June 2014

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Return to growth in fiscal 2014

($000’s) 9 Months

2014 9 Months

2013 Change

Gross profit 4,236 4,231 +5

Net income (loss) (63) (162) +99

Operating cash flow

341 (1,020) +1,361

Page 22: Thermal Energy International - June 2014

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Growing pipeline

Strong order backlog $5.8M (May 12, 2014)

Investment in sales and distribution starting to bear fruit

Outlook

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Page 23: Thermal Energy International - June 2014

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Immediate growth opportunities

Grow sales & distribution capabilities in key markets

North America, Europe & the Middle East

Established foothold in North America, U.K. and Italy, otherwise key markets are largely untouched

Search firms on retainer for adding sales and marketing staff

Develop additional corporate accounts

Cross selling

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Growth strategies

Introduce new products & services

Grow recurring revenue streams

Enter new markets

Acquire complementary products and businesses

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Summary

Large, fast-growing global market

Proprietary & proven solutions provide high ROI

Strong track record of growth

Growing global footprint

Page 26: Thermal Energy International - June 2014

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Listing summary

TSX-V: TMG

Recent Price: $0.11

52-Week Range: $0.03 to $0.14

# of Shares: 161.3 million

Market Cap: $17.7 million

Cash: $2.6 million

Total Debt: Nil

Share data as at June 2, 2014 Balance sheet data as at February 28, 2014 26

Page 27: Thermal Energy International - June 2014

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A more sustainable future. Today.

www.thermalenergy.com