Vaperma is developing membrane technology to reduce costs for ethanol and natural gas producers. The technology could save ethanol plants 40% on energy costs and natural gas processors 35% of operating costs. Vaperma has secured government funding and will demonstrate its technology at commercial ethanol facilities in 2005-2006 before seeking further funding to scale up manufacturing.

1. Advanced Gas Separation Systems using Polymeric Membrane Technology 5 th Annual Angel Investor Summit Ottawa, October 24, 2005

5. 50 kg/h Module and Dehydration System

7. Fuel Ethanol Dehydration Solution: Vaperma membranes provide an attractive solution to traditional distillation/molecular sieve unit (MSU). In combination with mechanical vapor recompression units, Vaperma Advanced Ethanol Dehydration Process Solution save as much as 40% on operating costs. ($2.9M energy savings for a 160 ML/yr world-class plant) Problem: In a typical corn-based ethanol plant, the beer from the fermentation process contains 8 to 12 % ethanol. In a cellulose-based ethanol plant, the beer ethanol concentration is 4%. Cost: The capital investment required for the installation of a dehydration system in a 160 ML/yr plant is approximately $23M USD with annual energy expenses of $6.8M for a modern ethanol plant and up to $9.8M for conventional ethanol plant or 4.2 and 6.1 cents per liter respectively.

8. Traditional Distillation/MSU Process 40% ETHANOL 90% ETHANOL

9. Traditional Distillation/MSU Process 40% ETHANOL 90% ETHANOL

10. Sour Gas Treatment Problem: Water and H2S are common impurities in natural gas that must be removed to meet pipeline specifications and prevent hydrate formation. Solution: Vaperma membranes provide an attractive solution to traditional glycol systems based on simple process designs, lower costs, lightweight and compact assembly. Ideal for remote locations with limited utilities. The membranes are suitable for a variety of offshore and onshore applications. Advantages: Vaperma membranes offers higher water and H2S selectivity and higher temperature over existing PRISM membrane technology. Market Focus: Natural gas fields (sour gas) of 10,000 to 20,000 Nm3/h operated by small pipeline head operators (Large fields are 50,000 to 150,000 Nm3/h).

11. Financial & Strategic Partners VC’s & Angel Investors Private Industry Partners Institut français du pétrole

12. Experienced Management Team Senior R&D engineer, Pyrovac Senior Process Engineer Bruno de Caumia Senior R&D engineer, Pyrovac Senior Process Engineer Pierre Plante Polymer scientist, Polymer Research Institute, Chengdu, China R&D Scientist Jingui Huang Membrane specialist, Pyrovac & Laval University VP R&D Richard Cranford President & CEO, Kontron Communications & Avestor Chairman & CEO Claude Letourneau Prior Experience Title Name

17. Commercialization Strategy - Ethanol Membrane Cartridges & Dehydration Systems Turn-Key Plants Value-added $0.4M US $23M US $150M US Cartridges Membranes Modules Dehydration Plant Ethanol Plant $3M US Membranes Systems $6M US 160 ML/yr plant Newco MJV Ethanol Dehydration Membrane Technology Provider Ethanol Technology Provider Ethanol Producers EPCM

19. Ethanol Dehydration Roll-out Plan Phase 2 : 1600 kg/h (40% Feed) Field Testing at CAI 2004 2008 Phase 1A : 50 kg/h (90% Feed) Field Testing at CAI 2005 2006 2007 2009 2010 Phase 1B : 100 kg/h (40% Feed) Field Testing at cellulose plant Field Testing Field Testing Field Testing Commercial Launch 15,000 - 20,000 kg/h 20 m2 per module 100 m2 per module Membrane module manufacturing development 100 m2 per module 50 kg/h Bench Unit 20 m2 (one cartridge) TEAM Project SDTC Project

20. Financing Plan

21. Funding Gaps Source: SDTC Innovation Chain Risk Profile Funding Intensity SDTC TEAM IRAP / CANMET