PowerVerde, Inc. (PWVI-OTCBB)

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March 16, 2012 Issue

The Most Powerful Name In Corporate News and Information


Manufacturing Advanced Renewable Electric Power Generator Systems, PowerVerde, Inc. is Pioneering the Ultra Low Grade Heat Space with Machines Producing Electricity on Temperatures as Low as 60 Degrees Celsius

Company Profile:
PowerVerde, Inc. manufactures advanced renewable electric power generator systems comprised of pressure expansion motors operating on any adequate heat or pressure source. These systems make electricity without fossil fuel, using only low-grade heat measured in BTU's. PowerVerde's unique pressure driven cycle referred to as an Organic Pressure Driven Cycle allows us to produce electricity on temperatures as low as 60 degrees Celsius. PowerVerde is an environmentally friendly green company producing zero emissions or waste stream byproducts.

Richard H. Davis
Chairman and CEO

Richard Davis is a lifelong resident of Florida. Having graduated Florida State University in 1980, he spent the next 30 plus years working in the investment banking field. Mr. Davis has participated as a "merchant banker" finding early stage niche companies, investing personally, with a group of angel investors. His legacy employers include First Equity Corporation of Florida, William R. Hough & Company and RBC Dain Rauscher. Mr. Davis currently devotes most of his working schedule to PowerVerde and a boutique trading/merchant banking firm Martinez-Ayme Securities. He is married and calls south Florida his home.

Renewable Energy

PowerVerde, Inc.
420 S. Dixie Highway
Suite 4B, Coral Gables FL.33146

PWVI-Print Version

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published March 16, 2012

CEOCFO: Mr. Davis, what is the vision and focus for PowerVerde?

Mr. Davis: PowerVerde is a renewable energy company, making electricity in the thermal or heat space. PowerVerde uses any low-grade heat, such as heat from the sun, geothermal or even waste heat from industrial processes such as manufacturing or energy production. Our BTU (heat) requirements are much lower than the industry norm needing only 60 degrees Celsius to make electricity. If you give us adequate heat, we convert the heat into electricity with no carbon footprint, no waste stream byproducts, and no noxious fumes, only clean renewable electrical energy.

CEOCFO: Is this something that is not being done in general? Does PowerVerde have a particular technology that allows you to do this?

Mr. Davis: There is a renewable industry known as the thermal space, historically dominated by large companies such as United Technology and Ormat Corporation. Their applications are very site specific and require much more heat than is generally available in "real world" applications. They work with much larger industrial sized Organic Rankine Cycle applications, which describe their style of pressure cycle. They cater from 200 kilowatts up to many megawatts, but again, these locations are very site specific. By site specific, I mean they work in places where maybe you have geothermal springs that are very hot creating unlimited amounts of BTUs or unique industrial manufacturing processes producing vast amounts of waste heat as a byproduct. In contrast, PowerVerde can capture enough BTU's to satisfy their minimal requirements and make this waste heat technology an everyday reality. Most current waste heat temperatures are not hot enough to promote these historic type technologies, and as compelling as they sound, that is why Organic Rankine Cycles and waste heat applications are not a common "household" theme. Power Verde, on the other hand, is catering to 200 kilowatts and below market. We are able to operate on heat temperatures much lower than our competitors. In a highly controlled test---not our commercial claims, or real world applications---we have actually made electricity on as little as 40 degrees Celsius. This is like bathwater! This is, we think, an example of where the future takes us. We do not think anybody closely compares to these kinds of metrics and this makes waste heat or solar possibilities really a giant economic reality. Harnessing very low grade heat would save this country billions of dollars annually.

CEOCFO: Would you please explain how the process works?

Mr. Davis: The waste heat thermal industry works mostly on a cycle called an Organic Rankine Cycle, and generally, it works much like traditional steam powered turbines using heated water as their "working fluid". They heat a working fluid, and in the case of say a nuclear power plant, the fluid or water expands and turns to vapor resulting in much greater volume than its previous liquid state. If you restrict this vapor say to a turbine, then it is forced into creating mechanical energy. It turns the expanders (blades) and makes electricity. If the working fluid is contained (closed loop) and reused this is an example of a "classic" organic rankine cycle, or "closed loop cycle". Again, names like United Technology Corporation, or Ormat Corporation, build systems like this. Generally, these systems are about a megawatt or larger. There are some applications as small as 200 kilowatts, but they are very rare. In the purest case of an organic rankine cycle, they are essentially flashing or boiling a working fluid or refrigerant like Freon or something along those lines. When it hits a certain temperature, maybe 200 or 300 degrees, it converts from a liquid to a gas. This gas is forced thru a turbine, which generates electricity. PowerVerde on the other hand has pioneered a unique pressure cycle that is non- organic rankine cycle in nature, nor utilizes expensive turbine technology. We are operating on pressure. We are operating on a unique pressure cycle we call an Organic Pressure Driven Cycle (OPDC). We heat our working fluid, we expand our working fluid and we have a unique proprietary driver that takes the expanded pressure and delivers it to a generator making electricity---mostly servicing the 200 kilowatt or below waste heat market on unprecedented low temperatures. That is our big differentiating factor----very low temperatures.

CEOCFO: Are people using the PowerVerde product today?

Mr. Davis: Last year we sold a 50 kilowatt system to the Dutch in the Netherlands known as Newton Green Power. They became our EU distributor and they purchased this machine we named "The Liberator". The Liberator has been demonstrated in an engineering/ manufacturing firm in Leeuwarden Holland since April of 2011. Moreover, in this particular application, it operates on about 82 degree Celsius temperatures. We did not consider this machine to be commercial but more of a beta test system for Europe's perusal. It is more of a show and tell, proof of concept system and PowerVerde has since been developing the next generation Liberator II. We have a laboratory in Scottsdale, Arizona, where we have been testing this new system. It uses much lower heat than the system we sold the Dutch last year. This second generation Liberator has demonstrated electricity on heat as low as 60 degrees Celsius. This new Organic Pressure-Driven Cycle system, we believe, may revolutionize the way electricity is made from waste heat or any low-grade heat.

CEOCFO: How does PowerVerde get the people that should pay attention to pay attention?

Mr. Davis: We very much believe that green energy has been a hot popular space to invest, however for the most part, green technologies are not continuous power but intermittent power. They only work when the wind blows or the sun shines. These technologies are the historic gold standard for how we generate renewable electricity. On the other hand, PowerVerde has engineered a continuous electrical production machine. The companies that have gotten visibility have applications that are mostly subsidized by governments. They (governments) mandate or subsidize you to buy this technology. We think that will never work in the long term, as commercial adoption must make economic sense based on return on investment criteria. Therefore, our price points make PowerVerde among the lowest priced systems in all the renewable space, that is, in terms of dollar price per watt or kilowatt. We believe that with these low price points the return on investment could be significant. That is, it pays for itself quickly. If you have waste heat, generally vented up through the roof of your factory, we would capture that waste heat and make electricity that could either be used in the plant itself or sold back to the grid. We believe that for renewable energy to be successful long-term, it must be able to operate without government assistance or subsidies and we believe PowerVerde is pioneering that space.

CEOCFO: How does PowerVerde reach potential customers that are bombarded on all sides with new ideas?

Mr. Davis: We are earmarking specific industries. In the case of Europe and our Dutch partner Newton, we know that they are more advanced compared to the United States in terms of renewable energy and what they pay for it. There is a lot of government participation, many subsidies. Countries such as Germany, Netherlands, or some other western European countries, are trying to become less dependent on foreign oil or oil in general. They fear Nuclear power since the Japanese incident and have already shuttered many gigawatts of nuclear electricity. I believe the Germans have mandated that by 2020 they would like 20% of their electricity to be generated by photo voltaic. Therefore, we have earmarked biogas or methane gas plants and geothermal opportunities in Europe. There are 7000 biogas systems in the Netherlands, Germany, Austria, Belgium and the Scandinavian countries. These essentially are "cow powered" electricity plants compensating the farmer. The Europeans are very big in dairy and wherever there is a dairy farm, you will find a methane plant. They are using the waste byproducts of cows------manure, and they are putting this in methane plants. These are domed cement cylinders where they add certain microbes. These microbes and the cow waste create a byproduct known as methane gas. These plants have elastic or domed latex covers and as the microbes generate the methane gas, the domes expand from which they siphon the methane gas into traditional generator sets, usually 500 kilowatts and above. Then they sell this electricity back to the grid and get a check every month from the government.

We have demonstrated that we can co-generate, meaning these generator sets throw off an amazing amount of heat. Everyone is familiar with his or her car, or any fossil fuel burning machine. Most of the energy used to propel a car or make electricity is wasted in the form of waste heat. Only a small fraction----maybe 20%-25% is literally is used for its intended purpose. These engines are really inefficient. We are able to take or capture this waste heat and co-generate additional electricity. Therefore, if a farmer is generating half a megawatt or 500 kilowatts of electricity from a methane plant, we could generate an additional 20% or an additional 100 kilowatts, by simply converting their waste heat into usable electricity. It comes down to return on investment. The owner of these facilities purchases the PowerVerde system, at a price per watt, much less, than he originally paid for his methane plant and adds considerable efficiencies to his system. We have also been talking with geothermal drillers and large capitalization energy companies about low temperature waste heat production.

CEOCFO: What is the financial picture like for PowerVerde today?

Mr. Davis: PowerVerde is a small publicly traded company. We probably have 500 or 600 shareholders. We trade under PWVI symbol. We went public in 2008. We have raised approximately $7 million, which is a very small amount of money for public companies working in our space. We are a careful judicious company and our principals own machine shops and factories which we make use of. We do not borrow other people's technology and put together, Rube Goldberg type contraptions and try to force them to work. We build it from the ground up much like the Boeing Corporation would do. We think we have demonstrated some world-changing technology. The financial picture is that when we need money, we sell stock. We are close to transitioning to a revenue and earnings model style company. We do have revenues, as we sold our first system last year to the Dutch but we would like to think that this year we would transition into a company with continuing revenues, earnings, market acceptance, and a growing product line.

CEOCFO: Will Europe be your primary focus?

Mr. Davis: For now! We have interest from many continents including Africa, the Middle East and South America, but currently our only licensee right now is Newton, the Dutch company. This year, as mentioned above, we believe we will be transitioning into a commercial enterprise. We probably are going to focus on the European market for now and not expand beyond that for the time being. They pay almost 3 times as much for electricity as in the U.S. Down the road we will enter into additional licensee agreements for the balance of the world.

CEOCFO: As a CEO how do you deal with the frustration of knowing that you have something that should be simple to understand and is ground breaking, but it seems to take a while to get it to the market?

Mr. Davis: These things take longer and cost more than one envisions. When we founded PowerVerde and went public in 2008, we believed that we would have a commercial machine out in a couple of years. It has obviously taken longer. If it were easy, other people would be doing it; many well capitalized companies would certainly be in our space and succeeding. It is frustrating that it takes longer and costs more, but we are always buoyed by the idea that this is a game-changer. This is a technology that really is helpful to the planet, to the end users, and possibly helpful to governments. This is a win/win/win. Therefore, even though it has taken longer and has been frustrating to painstakingly move forward and continue to develop the technology, we think we are very close. We think that we will be commercializing this technology this year.

CEOCFO: Final thoughts, why should investors pay attention today to PowerVerde today?

Mr. Davis: If someone does their due diligence, they are going to see that PowerVerde really is unique. We have working machines, real videos of machines making electricity. We have collaborations with some large companies and academia and we have some significant business opportunities, particularly in Europe. We also have access to capital. We are more than a business plan; we have working technology. We have had many qualified visitors visit our facilities in Arizona. Most or virtually all of them have said that they feel we are the leaders in our space. We really believe that if one looks really hard they are going to see real value in PowerVerde and are not going to find any competitors in the ultra low grade heat space we hope to pioneer.


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If someone does their due diligence, they are going to see that PowerVerde really is unique. We have working machines, real videos of machines making electricity. - Richard H. Davis



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