Decentralized Manufacturing and Distribution System “MADE IN U.S.A.” vs. Conventional “Made in China” Business Model

3. Made in China Minimum inventory: 1 container (48 units) Delivery time: 90 days after order Vendor payment terms: Cash or L/C in advance Freight costs: Container by sea & land Made in U.S.A. “Plan B” Minimum inventory: 2 units Delivery time: U.S. parts arrive weekly Vendor payment terms: Net 15-30 days Freight costs: Inbound freight for parts Let’s say the freight costs are equal, and continue. . . AMERICAN THERMAL POWER C O R P O R A T I O N

4. Made in China Capital required: $576,000 3,840% more U.S. Payroll needed: $ 8,000/mo. (2 people) Sales: Year 1 $635,328 Year 2 $847,104 Profit: Year 1 $ 107,294 Year 2 $ 175,059 Made in U.S.A. “Plan B” Capital required: $ 15,000 97.4% less U.S. Payroll: Included in unit cost Sales: Year 1 $847,104 Year 2 $847,104 Profit: Year 1 $112,059 Year 2 $127,059 Example 1: Sell 8 units per month, no growth But wait! There’s more. . . AMERICAN THERMAL POWER C O R P O R A T I O N

5. Made in China Capital Velocity (turnover) Year 1 1.1 Year 2 2.9 Return on Investment (ROI) Year 1 19% Year 2 98% Capital required at end of year 2 to maintain cycle: $288,000 Assets at End of Year 2 Paid Inventory: $432,000 Cash: $138,353 Example 1: Sell 8 units per month, no growth Made in U.S.A. “Plan B” Capital Velocity (turnover) Year 1 56.5 Year 2 56.5 Return on Investment (ROI) Year 1 747% Year 2 1,594% Capital required at end of year 2 to maintain cycle: $ 15,000 Assets at End of Year 2 Paid Inventory: $15,000 Cash: $254,118 Now which model is more profitable? AMERICAN THERMAL POWER C O R P O R A T I O N

6. Made in China Sales (units) Year 1 $635,328 (72) Year 2 $847,104 (96) Profits Year 1 $107,294 Year 2 $175,059 Assets at End of Year 2 Paid Inventory $432,000 Cash $138,353 Additional capital to increase sales by 1 - 100 units per year: $288,000 Now, capitalize each model the same, $576K Made in U.S.A. “Plan B” Sales (units) Year 1 $32,528,794 (3,686) Year 2 $32,528,794 (3,686) Profits Year 1 $4,303,066 Year 2 $4,879,066 Assets at End of Year 2 Paid Inventory $576,000 Cash $9,758,131 Additional capital to increase sales by 5,000 units per year: $ - 0 - U.S. manufacturing can create more value with less capital. AMERICAN THERMAL POWER C O R P O R A T I O N

7. Made in China Jobs Created In China 10 U.S. direct hires 2 U.S. Vendor jobs 0 U.S. Installers 8 Not even helping the Chinese economy very much. Capitalize each model the same, $576K Made in U.S.A. “Plan B” Jobs Created In China 0 U.S. direct hires 126 U.S. vendor jobs 126 U.S. installers 182 The same capital has resulted in 424 more U.S. jobs created and $9,600,000 more cash on hand. AMERICAN THERMAL POWER C O R P O R A T I O N

8. Why “Plan B” is immune to foreign competition Made in China Central factory ships to U.S., conventional distribution model U.S. Distributor Unit Cost $6,000 Margin 15% $1,058 Sells to Dealer at $7,058 Dealer Pays Freight $300 Dealer Cost $7,358 Dealer Margin 30% $3,153 Price to Customer $10,511 19% higher A centralized U.S. competitor would have even higher costs and prices. The extra costs do not add value. Made in U.S.A. “Plan B” Local factories sell direct in local areas Unit cost $7,500 Profit $1,324 Selling Price to Customer $8,824 16% less A U.S.-made product at a lower price is a better value every time. AMERICAN THERMAL POWER C O R P O R A T I O N