TSX-V: ESV
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This presentation may contain forward-looking statements and information that reflects the current views of the management of ESI Environmental Sensors Inc.
Forward-looking statements involve inherent risks and uncertainties that may cause our actual results to be materially different. For detailed discussion of forward looking statements and risk factors, please refer to ESI’s annual report as filed with SEDAR.
FORWARD LOOKING STATEMENTS
FORWARD LOOKING STATEMENTS
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• Proven and patented water management technology
• Strategically positioned in high growth industry verticals
• Commercial roll-outs to recognizable clientele
WHO WE AREWHO WE ARE
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SHARE STUCTURESHARE STUCTURE
Listing Details TSXV: ESV
Share Price (Aug 27) $0.40
52 Week High/Low $0.42/$0.235
Shares Outstanding 18,761,889
Warrants 9,148,099 (WAP $0.55; WAL: 1.1 Years)
Options 276,000 (WAP $1.0 ; WAL: 1.2 Years)
Fully Diluted 28,185,988
Insiders Holding 35%
Institutional Holding 17%
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INVESTMENT HIGHLIGHTSINVESTMENT HIGHLIGHTS
Patented & Proprietary Technology Focused on Driving Efficient Water Use
Strong Product Platform ; $12mm spent to date on R&D
Partnering with Leading Control Systems Companies
Excellent Growth Opportunities Driven by Global Water Shortage & Declining Oil Reserves
Transition from innovators to professional management
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MANAGEMENT SIGNIFICANT SHAREHOLDERSMANAGEMENT SIGNIFICANT SHAREHOLDERS
MANAGEMENT & BOARD
MANAGEMENT & BOARD
Ian Middleton – Managing Director ● Over 30 years of experience in senior positions● President of Development Finance Corp. Born and
educated in New Zealand, having attended Auckland University
David Porter -- EVP Sales and Marketing● BA in Economics and a MBA from UVIC● Former Director of Business Dev. at Carmanah
Technologies (TSX:CMH) and ACD Systems (TSX:ASA)
● Experienced in developing global retail and distribution network
Bernard Beauchesne – Chief Financial Officer● Graduate of UBC● Senior Management experience at Diversified
Industries (TSXV:DVS)● Various roles including President, Director, CFO and
Corporate Secretary
Robert Dennis Alton – Chair and Director
● Bob has 35 years of experience in corporate dev. in both the Agricultural and Oil and Gas Industries
● Bob currently sits on several private company Boards
Edwin (Bill) Mitchell – Director, Secretary, and Chair of Governance Committee
● Bill has an extensive background in marketing, communications, journalism and in matters of corporate
compensation and union negotiations: three decades with both CTV and CBC, in seven of the provinces
Trevor Moat – Director of New Product Dev.● Masters degree at Carleton University in Ottawa● Specialties are in signal processing algorithms for system
identification and control● Held lead positions at Magna International and SOMA
Networks Inc. in Toronto
OIL INDUSTRYOIL INDUSTRY GEOTECHNICALGEOTECHNICALAGRICULTURAL, GOLF & TURF
AGRICULTURAL, GOLF & TURF
THREE INDUSTRYVERTICALS
THREE INDUSTRYVERTICALS
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Agricultural Accounts for up to 70% of world’s freshwater usageOnly 4% of U.S. irrigated land uses water management
technology
Oil World wide average of three barrels of water for every one barrel of oil produced Cost per barrel to produce & refine water in oil: $8 in Alberta, $3 in California
Turf Over 17,000 golf courses in North America (National Golf Foundation)
“Among the most important issues facing the game of golf is that of water use” James T. Snow, National Director USGA Green Section
TARGETED VERTICALSTARGETED VERTICALS
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E.S.I. SOLUTIONS
E.S.I. SOLUTIONS
Gro●Point™ - measures soil moisture by volume for agricultural soils. Enables higher quality crops and greater yield and reduced leaching; focused on the Agriculture and Turf markets
Flo•Point™ - inline water sensors that measure water content in a hydrocarbon stream; oil water cut sensors. Enables optimized production – more net oil
Moisture●Point® - profiling moisture monitoring systems focused on the Geotechnical, Scientific and Academic Research markets
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Accurate Knowledge of Soil Moisture Level Can:• Increase crop yield
• Increase crop quality
• Decrease fertilizer use & costs
• Decrease leaching and erosion
• Decrease production costs
High Value Crops Include:
• Cranberries• Asparagus• Peppers• Tomatoes
• Grapes• Avocados• Tree Fruits• Citrus
Gro•PointTMGro•PointTM
AgricultureAgriculture
Irrigated Land in N.A: 64 mm acresRevenue per Acre: $500 - $1250Addressable Market: $30 BlnGross Margin: 50%+Penetration: 40 Countries –
Netafim, Adcon, Gro Net, PureSense
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Gro•PointTM Contd.Gro•PointTM Contd.
Moisture Monitoring Enables Managers to:• Provide superior turf quality
• Reduce overhead costs
• Enhance environmental stewardship
• Parks & recreation
• Golf courses
Turf GrassTurf Grass
Golf Courses in N.A: 17,000+Revenue per Course: $50 - $60,000Gross Margin: 50%+Addressable Market: $1B+Penetration: Signature Control
Systems, City of Calgary, City of LA
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OilOil
Problem: • The Industry needs real-time, automated measurement of water content in oil production• Pinnacling causing over production of water, damage to formation and inefficient operation
Solution: Flo•Point™ continuous real-time data: • reduces labor costs and downtime
• optimizes oil production
Pay back: Vertical Well – 1 to 3 months Horizontal Well – 0.3 to 1 month
Flo•Point™Flo•Point™
Oil Wells in N.A: 700,000+Revenue per Well: $15,000 - $20,000Gross Margin: 60%+Addressable Market: $1 B+Penetration: EnCana (Canada), Encore
Acquisition Co.(USA), ANA (U.A.E)
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Moisture Monitoring Helps Determine:• If water has infiltrated the cover• If moisture is moving upwards from the waste• Stability of mine waste piles and exposed slopes• ESI profiles landfills & monitors water movement
GeotechnicalGeotechnical
“Isolate the waste from humans and animals, and prevent movement of the waste by wind or water”
Source: Mitretek Systems
Moisture●Point®Moisture●Point®
Landfills in N.A: 1200+Revenue per Landfill: $100,000+Gross Margin: 55%+Addressable Market: $120 mm+Penetration: City of LA, Alcoa Aluminum, Little Rock AK, City of Glendale
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Gro●Point™• Fragmented market • More accurate and robust than competitors
Flo•Point™• Focus is on the mid-range of 10%-90% water in an oil stream• Flo•Point™ is more accurate in both light and heavy oil and is price
competitive
Moisture●Point®• More accurate and robust than competition• ESI is the only player in the landfill market
COMPETITIVE LANDSCAPE
COMPETITIVE LANDSCAPE
Please see Appendix for competitive charts
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Pro Forma Income(Internal Only)
Pro Forma Income(Internal Only)
2.908
6.047
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1.279
3.628
7
-0.171
1.97
4
-2
0
2
4
6
8
10
12
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FY2008 FY2009 FY2010
$mm
Revenue Gross Profit EBITDA
FINANCIAL FORECASTFINANCIAL FORECAST
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REVENUE BY SECTOR
REVENUE BY SECTOR
F2008 -09 F2009 -10 F2010 -11
Gro·Point Systems Moisture·Point Flo·Point
1.7281.7280.340.34
0.540.54
3.753.750.570.57
1.721.725.655.65
0.970.97
5.665.66
($ M)
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• Enhance “end to end” system product approach• Expand presence in agriculture, oil & turf markets• Strategic partners to provide speed to market• Disciplined, focused product development• Enhance product line with increased functionality
GROWTH STRATEGYGROWTH STRATEGY
INTERNALINTERNAL
• Expand third party partnering for increased vertical integration in sales, distribution & installation
• Broaden technology platform to other industry sectors• Continue to broaden geographic reach• Acquire & integrate with third party technologies
EXTERNALEXTERNAL
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MILESTONESMILESTONES
2007 2008Q4 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Encana Trial
Calgary Municipal Trial
Introduced Gro•PointTM Wireless to cranberry market
Partnership with Signature
John Deere
Widening Distributor Network
New Partners Signed
Strategic alliance w/ major agriculture service
provider
New Division Encana Trial
Expanding internal sales force by sector
Expansion w/ large international oil co.
Abu Dhabi trial starts
NZ wineriesGro•.Point
Oil Sands Monitoring
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OFFERING SUMMARYOFFERING SUMMARY
Issuer: E.S.I Environmental Sensors Inc. (TSXV: ESV)
Offering: Units consisting of: One Common Share One Half Common Share Purchase Warrant
Amount: Cdn $5,400,000
Issue Price: Priced in context to market
Deal Type: Non-brokered
Offering Procedure:
Private Placement to Accredited Investors
Finder’s Fee: 8% cash
Closing: On or around September 30, 2008
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CORPORATE HEAD OFFICE:
2071C Malaview Avenue West
Sidney, BC V8L 5X6
CANADA
www.esica.com
TSX-V: ESV
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APPENDIX
ESI Acclima Agrilink/Aquaspy
Baseline Decagon Irrometer Sentek
Technology TDT TDT Capacitance
TDT TDT, Capac.
Gypsum Block, tensiometer, capacitance
Capacitance FDR
Profiling Yes – MoisturePoint
No Yes - AquaSpy
No No No Yes-Triscan
Accuracy (range of measurement)
+/- 1% (8 to 42%)
+/- 3% (0 to 100%)
N/A N/A +/- 3% (0 to 40%)
N/A N/A
Salinity compensation
Tolerate high salinity
Stability decreases over 2dS/m
No Stated to “tolerate high salinity”
State salinity effects are greatly minimized”
Internal compensation
Measure salinity separately
Applications Agri., Turf, Research
Turf Agri., Turf, Research
Turf Agri., Research
Agri., Turf, Research
Agri., Turf
Telemetry options
Wired, Wireless
Wired, Wireless
Wireless Wired Wired, Wireless
Wired, Wireless Wired, Wireless
Wireless interface
Wireless, Windows
N/A Yes No Yes Yes Yes
User interface at location
Handheld, data logger
Controller panel
Data logger Controller panel
Handheld, data logger, PDA
Handheld, data logger, PDA
Handheld, data logger, PC
Installation technique
Slide hammer, digging
Augur Augur Trenching Trenching, insertion tool
Augur Access tube
Ancillary equipment
None Requires 2 wire system linked to controller
None Requires 2 wire system linked to controller
None None None
Robustness Very Moderate Moderate Moderate Fragile Very Moderate Price/probe (USD)
$155 $200 to $350
$600 $300 $100 $90 N/A
Gro•PointTMGro•PointTM
CompetitionCompetition
CompetitionCompetition
Moisture●Point®Moisture●Point®
ESI Delta - T IMKO Technology TDR Capacitance, FDR TDR Profiling Yes Yes Yes Accuracy (range of measurement)
+/- 1% (8 to 42%) +/- 1% (unclear about range) +/- 2% (0 to 40%), +/- 3% (40 to 60%)
Salinity compensation Tolerate high salinity Sensitive to low salinity Tolerant to moderate salinity Applications Agriculture,
Research Agriculture, Research Agriculture, Research
Telemetry options Wired, Wireless Wired, Wireless through weather station
Wired
Wireless interface Wireless Through weather station N/A User interface at location Handheld, data logger Handheld, data logger Through Palm/Windows Installation technique Insertion directly into the
soil (limited soil disruption)
Access tube Access tube
Ancillary equipment None None None Robustness Very Potentially fragile Moderate Price/probe (USD) $500 Comparable but no firm pricing Comparable but no firm
pricing
Instrument cost for ESI MP is approx. $5500 USD
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PROPRIETARY TECHNOLOGYPROPRIETARY TECHNOLOGY
TDR: Time Domain ReflectometryTDR: Time Domain Reflectometry
• Similar to radar
• Electro-magnetic Pulse
• Time equates to amount of moisture / water present
• Reflection occurs 6x in standard probes
• Readings at multiple depths over length of probe
• Continuous vertical or horizontal profile
• TDR used in the Moisture.Point product suite.
TDT: Time Domain TransmissionTDT: Time Domain Transmission
• Enhanced version of TDR invented by ESI
• Time equated to amount of moisture / water
present • Continuous transmission line
• Simpler signal allows for high accuracy
• TDT used in the Gro.PointTM and Flo.PointTM product suites
WORLD LEADING MOISTURE SENSING TECHNOLOGYWORLD LEADING MOISTURE SENSING TECHNOLOGY
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ENCANA TRIALENCANA TRIAL
Heavy Crude – (API 12-14) Watercut 45-65%
Junction Box, Disconnect Switch & RS232 Cable
Medium Crude – (API 30-40) Watercut 65-85%
Medium Crude – (API 30-40) Watercut 65-85%
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Pad 17 100 13-23
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35
40
45
50
55
60
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Time
Wa
ter
Cu
t (%
)
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18
19
20
21
22
23
24
25
26
27
28
29
WC
FTemp
ACTUAL WATER CUT FIELD DATA
ACTUAL WATER CUT FIELD DATA
ESI MeasuresContinuously
ESI Data far Superior
30
35
40
45
50
55
6027/1
1/2
006
04/1
2/2
006
11/1
2/2
006
18/1
2/2
006
25/1
2/2
006
01/0
1/2
007
08/0
1/2
007
15/0
1/2
007
22/0
1/2
007
29/0
1/2
007
05/0
2/2
007
12/0
2/2
007
19/0
2/2
007
26/0
2/2
007
05/0
3/2
007
12/0
3/2
007
19/0
3/2
007
26/0
3/2
007
02/0
4/2
007
BSW- meter BSW- manual
Flo•PointTM MeasurementsFlo•PointTM Measurements