Vertical Axis Wind Turbine Generator safe for birds & bats, efficient, developed for low wind environments

1. EXECUTIVE SUMMARY
PREVAILING ENERGY INC.
6/28/2009
COMPANY OVERVIEW: Prevailing Energy, Inc (“Prevailing Energy” or the
Transaction: “Company”), formed in 2005, is a developer, manufacturer and
$3 million equity investment supplier of patent pending vertical axis wind turbine technology. The
Industry: Company’s specific target markets are the world wide business and
Vertical axis wind turbine residential markets. The company is presently located at 4943 Marin
technology
Drive, Oceanside, CA. Collectively, management has many years of
Contacts: wind turbine and electronic technology experience specifically in the
Larry Frew areas of vertical axis wind technology development, sales and
CEO
Prevailing Energy Inc.
business development. Prevailing Energy has patent pending wind
C: (760) 310-7461 technology that no other company in the world has. It can replace
F: (760) 732-3790 exiting technology at substantial cost savings and increased power
Frew2@cox.net output. The three main product lines have already been recognized
Process as superior to its competition providing it with the opportunity to
1. Execute NDA. substantially increase its customer base and share in an emerging
2. Distribute Information
Memorandum. scalable vertical axis wind turbine world wide market.
2. Conference call to introduce
company and management INDUSTRY OVERVIEW:
and to discuss preferred The current world wind turbine replacement market is estimated at
investment structure. 96 Billion US Dollars. At Prevailing Energy, we believe we can
3. Management meeting and
presentation. capture a significant percentage of the existing world wide wind
4. Investor due diligence. replacement market. Over the past six years global wind power
5. Execute term sheet capacity continues to grow at average accumulative rate of 29% per
year.
TRENDS AND OPPORTUNITY: Currently, vertical axis wind turbine
MARKET
sales are being driven by both higher energy prices, existing and
new state and local air quality regulations, federal, state, and local grants and tax incentives. As
generating costs continue to fall and as public concern about climate change escalates, the
world is fast turning to wind for its electricity. Since 1995, world wind generating capacity has
increased an astounding fivefold. In stark contrast, the use of coal—the principal alternative for
generating electricity—peaked in 1996 and has declined by 6 percent since then. The VATG is
based on proven technology that was developed by Brandt Goldsworthy in the late 1980’s, and
possesses competitive advantages over other wind devices and alternative renewable energy
technologies. The VATG systems in the 1-kilowatt to 1million watt range of rated output can be
installed in series on roofs and open areas of office buildings, shopping centers, and other
commercial facilities in urban areas with low to moderate wind speed conditions with no
environmental impact on the surrounding community. For this reason, Prevailing Energy will first
target the premium priced, $12 Billion worldwide secondary generation power market (defined
as less than 2.5MW grid-connected or non-grid connected locations). Prevailing Energy is
already focusing on a range of commercial opportunities in each of four key geographical
regions: North America, Europe, Japan and China, and Australia.
PRODUCTS:
Product/Description Competitive Advantage
Zephyr 150KW to 1MW Patent • Simpler: One moving part. One moving part means longer
Pending warranty, more efficiency and more power output in low wind
environments. Outputs 1.9 times similar horizontal; turbines.
Prevailing Energy Inc. –Confidential- Do Not Copy or Distribute Without Permission
4943 Marin Drive Oceanside, CA 92056
Tel: (760) 310-7461 • Fax: 760) 732-3790 -1-

2. EXECUTIVE SUMMARY
PREVAILING ENERGY INC.
6/28/2009
Product/Description Competitive Advantage
This VATG is designed for larger • Direct drive: There are no gears, belts, or brushes in the
applications such as wind farms or turbine assembly. Having no gears, belts or brushes also improves the
industrial applications. Prevailing efficiency of the unit and also making more power available in low
Energy’s Market in these sizes would be winds. At the present time the transmissions of the horizontals
to sell Power to the customers at a turbines last less than a year. So maintenance costs, down time
discounted rate than what they are (months), and replacement issues are a serious problems.
paying today. Prevailing Energy will • No Threat to Birds or Bats: The VATG design greatly reduces
determine a project size and value to the the risk of bird kills occurring because the lower outer diameter
end user. rotational speeds keep the turbine visible and safe from bird collisions.
At the present time there is litigation against the Altamont Wind Farm
by Environmental Agencies for bird kills. CEC estimates there are 1,766
to 4,721 bird kills a year. The courts have mandated they shut down
for the winter months to try to protect the birds causing an estimated
9 million dollar loss in generation.
Zephyr 3KW to 150KW Patent • Less Noise Impact: The conventional wind turbines currently
Pending available today cannot be installed in the vicinity of animals or people
because the spinning blades of these turbines make loud irritating
sounds while rotating. The VATG of Prevailing Energy is virtually silent.
Due to the convenient size of these • Not directional: No wind vaneing. There is no mechanism to
VATG, the market that fits with them is keep the turbine facing the wind; this makes the system simpler and
the residential, small business and Farm more efficient. This allows Prevailing Energy to have a longer warranty
Market. One or two of the Zephyr 3KW than anyone else and produce power at low wind speeds when the
units can supply up to 90% of the power other horizontal wind turbines rotors are not even turning.
needed for a medium sized single family • Lower height requirements: Conventional wind turbines need
home, small business and farm. In this to be elevated over 100 feet into the air to work efficiently. The VATG
circumstance, Prevailing Energy would will require only 25-30 feet of height from ground level to do the same
provide the VATG’s to the end users for job and will meet many city and local height requirements for such a
their power requirements. structure. Both the turbines and the generators are stackable,
increasing power output capacity from a single footprint.
Zephyr 1KW to 3KW Patent • Reduced Cost of Kilowatt Hour Usage: Installation is less
Pending expensive than similar installations of conventional Wind Turbines.
This VATG is designed specifically for the Because of the simplicity of design and the direct drive mechanisms
Marine or Recreational Vehicle markets. make the VATG cost less than conventional Turbines. The maintenance
These markets currently utilize an oil cost is reduced due to a simpler direct drive mechanism and the
based powered generator that have Turbine is mounted closer to the ground
limitations such as noise and cost of the
fuel. The Zephyr 1KW or 3KW eliminates
both of these limitations.
• Less Visual Impact: Because of the compact size and
displacement of the VATG, the VATG will stand less obtrusively within
the surrounding community and can be painted to blend in with its
surroundings.
ACCOMPLISHMENTS:
Prevailing Energy has developed and is currently commercializing the world's first economically
viable and scalable Vertical Axis Wind Turbine electric generation system. Prevailing Energy’s
VATG Technology offers a proven, low-cost, reliable, easily scalable, non-polluting, aesthetically
pleasing, non-audible and safe source of renewable energy. The Turbine Generator can operate
in low wind speed environments. Prevailing Energy Has patent pending technology that protects
our market share for future growth.
We are developing a new type of Vertical Axis Wind Turbine Generator. The sizes are completely
scalable and we are investigating diameters from 10 inches to 30 feet. While the 10-inch model
has a predicted output of 12 Watts in a 10 mph wind the 30-foot VATG output is to be more
than 5000 Watts in the same wind.
CAPITALIZATION: Since inception, the Company has raised close to half a million dollars from high
net worth individuals and management. Management and employees owns 90%, the remainder
Prevailing Energy Inc. –Confidential- Do Not Copy or Distribute Without Permission
4943 Marin Drive Oceanside, CA 92056
Tel: (760) 310-7461 • Fax: 760) 732-3790 -2-

3. EXECUTIVE SUMMARY
PREVAILING ENERGY INC.
6/28/2009
is owned by individuals and third parties who have provided services to the
Company.
Prevailing Energy Inc. –Confidential- Do Not Copy or Distribute Without Permission
4943 Marin Drive Oceanside, CA 92056
Tel: (760) 310-7461 • Fax: 760) 732-3790 -3-

4. EXECUTIVE SUMMARY
PREVAILING ENERGY INC.
6/28/2009
KEY MANAGEMENT:
Larry H Frew President and CEO has more than 25 years experience in the electronics
industry. He has been instrumental in engineering and product design programs that span a
variety of commercial markets, including high-reliability military projects and medical programs.
Prior to his association with Prevailing Energy, Inc., Mr. Frew was Director of Engineering of
ZoneWorx, Inc., and was responsible for all of the basic research, engineering development,
engineering Manufacturing, and designs that combined analog and digital concepts and
components which led to the ZoneWorx technology. He has been a principal in five successful
company start-ups. Mr. Frew graduated from The Ohio State University in 1979 with an
Electrical Engineering degree and post-graduate work in microprocessor architecture, optical
properties of silicon, and advanced energy conversion. Mr. Frew has a minor degree in nuclear
energy. Mr. Frew started his career as a faculty member in the Astronomy Department at The
Ohio State University. One of Mr. Frew’s designs for a Bendix Oceanics’ state-of-the-art SONAR
tracking system for NATO was highlighted in the feature film, The Hunt for Red October.
John D. Sandberg, CFO and Secretary, is an experienced Financial Manager with a diverse
background in manufacturing, serving as both a consultant and employee, developing strategies,
systems, policies and procedures, with successful implementations in MRP and ERP
environments. Most recently Mr. Sandberg served as Controller at Nicollet Process Engineering,
Inc. from 1995, and played a key role in bringing it public in 1996. Prior to that Mr. Sandberg
served as Controller for Nystrom Inc. a manufacturer and distributor of sheet metal access
products, roof and floor hatches, and fire extinguisher cabinets. He was with the company from
1991 to 1995 and successfully managed and executed a turn-around from several years of
losses to substantial profits in 1992, 1993 and 1994. Mr. Sandberg owned an alarm monitoring
business and was a financial consultant from 1988 to 1991. Prior to running his own business,
he served as Controller at American Monarch Corporation for three years and as financial analyst
and cost manager at Resistance Technology for two years. From 1966 to 1983 Mr. Sandberg
was a manager of financial planning and cost at McQuay, Inc. a manufacturer of OEM coils, air
conditioning and heating equipment, cast metals, and heavy road equipment. Mr. Sandberg
graduated from Mankato University in 1965. He served two years in the armed forces in 1965
and 1966. He has been a member of many financial associations, and has served as financial
advisor for many non-profit organizations.
Thomas K. Quick, Director of Technical Sales, Prior to joining Prevailing Energy, Inc., Mr.
Quick was Division Manager for the die cast division at Nicollet Process Engineering, Inc., an
industry leader in die cast monitoring and control products. Responsibilities included all sales,
marketing, product specification and customer service. Prior to joining Nicollet Process
Engineering, Mr. Quick spent 13 years in quality management and quality engineering with
leading die cast manufacturing companies. Mr. Quick has completed upper level course work in
quality assurance management including up to 250 hours of Statistical Process Control training
(SPC). Mr. Quick’s 21 years of experience in the die cast industry and process control brings to
Prevailing Energy, Inc., an extensive knowledge base and strong sales and marketing skills.
Robert D. McCarthy, Director of Marketing, has over 23 years experience focused on marketing
and sales for business and real estate transactions. Mr. McCarthy is currently a co-owner in a
nation wide mortgage banking operation. Mr. McCarthy has been a business owner and manager
in the real estate industry for the last 19 years. Mr. McCarthy has a BA in communications from
California State University Northridge.
INVESTMENT: Prevailing Energy is seeking $3 Million in return for a minority ownership position in
the company and a board seat. Such funding will be allocated towards continued product
development and verification.
Prevailing Energy Inc. –Confidential- Do Not Copy or Distribute Without Permission
4943 Marin Drive Oceanside, CA 92056
Tel: (760) 310-7461 • Fax: 760) 732-3790 -4-