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Lighting Science Group 27.133.182 106.169.78 244.156.62 222.117.114 178.194.209 146.73.158 0.56.104 Charts.

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Presentation on theme: "Lighting Science Group 27.133.182 106.169.78 244.156.62 222.117.114 178.194.209 146.73.158 0.56.104 Charts."— Presentation transcript:

1 Lighting Science Group 27.133.182 106.169.78 244.156.62 222.117.114 178.194.209 146.73.158 0.56.104 Charts

2 DRAFT Business Overview 1

3 DRAFT Snapshot of Lighting Science Group LED value chain Luminaires Retrofit lamps Lighting Science is an LED technology leader currently focused on the enormous general illumination opportunity Systems Modules Chips Materials Components (1)Adjusted for non-cash sales incentive related to THD warrant; GAAP revenue is $21.3 million. Early leader in LED general illumination with a sustainable position Technology leader More than one million retrofit lamps shipped in 2H 10 alone Tenured lighting industry professionals, as well as LED technology veterans Differentiated focus and approach Predecessor company founded in 2002 Headquartered in Satellite Beach, Florida 243 employees (152 in US) as of December 31, 2010 Annual and quarterly historical revenue (1) CAGR:60.0%YoY Growth:329.6% 2

4 DRAFT LSG is established in a critical position in the LED ecosystem Technology leadership and recognitionDominant channel partners Validation through large, discerning client list Leading supply chain expertise 3

5 DRAFT LSG is a leading provider of LED products for general illumination Lighting Science has the technology, people and experience to sustain its position in the LED market Wealth of industry experience LSG is a pioneer in the industry, having sold LED-based lighting products for nearly a decade Senior management team consists of long- tenured lighting industry professionals as well as LED technology veterans R&D team includes ~50 research scientists and engineers with Ph.D.s or Masters degrees in a range of disciplines Deep knowledge of the disciplines core to the development of leading LED products – underpinned by portfolio of 124 patents Product offering Broad but focused product portfolio At the forefront of cost and performance Offered first LED retrofit lamp to be ENERGY STAR qualified – currently offer 89 qualified lamps 46 new products and 478 SKUs launched in 2010 59 new product launches 2011 YTD Recently launched revolutionary infrastructure product lineup Sold over 1 million LED retrofit lamps during 2H10 alone and expected to sell over 2 million lamps in 1H11 4

6 DRAFT Investment highlights Leader in a multi-billion market opportunity in early stages of transition – exceptional secular growth Significant improvements in profitability through transformational manufacturing and supply chain initiatives Unique position in LED general illumination: a downstream, pure-play LED provider Multiple, compelling growth drivers Differentiated system-based approach and deep technology acumen Deep market reach through multifaceted channel strategy and strong relationships Broad but focused range of lighting products developed with application-specific expertise 5

7 DRAFT Leader in an enormous multi-billion market opportunity in early stages of transition Other 78% Lighting 22% Traditional 97% Traditional >95% Total: ~$100bn LED <5% 2009 U.S. grid electricity consumption 2009 global lighting market size Total: ~$300bn Source: Freedonia, Wall Street Equity Research Lighting presents a vast opportunity to reduce energy consumption Global lighting market is significantly underpenetrated by LEDs The total addressable market for LED lighting products includes fixtures and lamps, as well as the enormous value of potential energy savings 6

8 DRAFT Differentiated system-based approach and deep technology acumen System-based approach Focused on the interrelationships between components and subsystems In-house capabilities for critical components and subsystems Modular approach to product development Deep technology expertise Over 120 issued and pending patents Over 50 research scientists and engineers with advanced degrees Distinguished CTO with decades of relevant R&D experience Application-specific expertise Extensive lighting industry expertise Deep understanding of functionality under actual operating conditions Knowledge of what attributes end users value for each application Collaborative approach Flat organizational structure Research, design and manufacturing team collocated on the Space Coast Industry-leading product performance Ability to manage product manufacturing complexity and cost Culture of innovation Nimble, quick to market Flexible component sourcing 27.133.182 106.169.78 244.156.62 222.117.114 178.194.209 146.73.158 0.56.104 Charts 7

9 DRAFT LSGs broad offering enables targeted applications within a range of market segments Government infrastructure Schools and universities Retail and hospitality OEMs Infrastructure Lamps Commercial & architectural Targeted markets Highly tailored products LSG targets applications across several markets for which the return on investment, total cost of ownership and other benefits currently present clear and compelling reasons for LED adoption 8

10 DRAFT Product overview LAMPS Broad range of LED retrofit lamps that interface with existing fixtures and sockets Exhibit consistent color, excellent light distribution and brightness Marketed under LSGs DEFINITY brand and also sold on a co-branded and private label basis INFRASTRUCTURE LUMINAIRES Combine energy efficiency, long life, high lumen output and excellent light distribution Targeted applications: parking facilities, outdoor areas, warehouses and manufacturing areas COMMERCIAL, ARCHITECTURAL AND RESIDENTIAL LUMINAIRES Designed for retail display applications and offer high customization Excellent color and temperature control for high value and perishable products Also offer LED-based spot, accent, recessed, pendant and track lighting, which offer uniform illumination and energy efficiency CUSTOM LIGHTING SOLUTIONS Custom LED lighting solutions for architects, lighting designers and research projects 9

11 DRAFT Lamps Infrastructure and luminaries Broad market reached through multifaceted channel strategy and strong relationships Multi channel strategy leveraging on established lighting distribution channels Co-branded Private label Direct sales Distributors Independent Sales Agents International partners Currently US-focused with growing international footprint Unique sales organization that supports the Companys channel strategy VP Professional Sales VP Strategic Accounts Account focusedProject focused Commercial, architectural and residential luminaries Product families National Accounts Public InfrastructureStrategic Accounts Commercial & Industrial 27.133.182 106.169.78 244.156.62 222.117.114 178.194.209 146.73.158 0.56.104 Charts Rebate strategy supports all sales activities 10

12 DRAFT LSG has key customers within its end markets Government Infrastructure LABSL and DPW NYC Design Competition Orlando Public Works Schools and Universities Retail and Hospitality Commercial Related Properties Private Label & OEMs Other Major Lighting Brands 11

13 DRAFT In addition to improving system efficacy, LSGs approach has a meaningful impact on manufacturing cost and product lifetime Designing a leading LED system requires a deep understanding of numerous technologies Packaged LED Overall lamp efficacy, light output, quality and lifetime driven by interoperability of packaged LED with other components Optics Determines intensity, direction and spread of light – tuned to packaged LED and intended application Intelligent controls Leverages digital functionality of LEDs and enables enhanced features Requires understanding of complementary technologies Power supply Drives LED and luminaire efficacy and regulates light output through management of power to packaged LED Thermal Effective heat dissipation required for efficient performance of LED package and electronics – reduces color shift and improves overall device lifetime 27.133.182 106.169.78 244.156.62 222.117.114 178.194.209 146.73.158 0.56.104 Charts 12

14 DRAFT Enhancement in systems will drive improvements in LED lighting in the future The majority of expected improvement is to come from outside of the LED (1) Source:U.S. Department of Energy (Solid State Light, Research and Development: Multi-year Program Plan, May 2011). (1)LSGs technology roadmap includes development of remote phosphors. (2)Includes internal non-radiative, extraction efficiency, and current droop (peak vs. 35A / cm2). (3)Includes Phosphor conversion, scattering / absorption / color mixing, and electrical efficiency. (4)Includes LED thermal stability, phosphor thermal stability, LED driver and fixture and optical efficiency. Core epi represents only 8.7% of the expected improvement Package and luminaire loss channels and efficienciesIllustrative bill of material for an LED system (2) (3) (4) Packaged LEDs represent ~30% of overall system cost, indicating that greater cost-down potential lies beyond the package LSG has the technology expertise and system integration capabilities to realize the anticipated improvements in efficacy 13

15 DRAFT Technology case study: A19 60W replacement lamp comparison 151 parts80 parts LSG 60W EquivalentPhilips 60W Equivalent 14

16 DRAFT Examples of areas of focus underpinning LSGs technology roadmap LEDThermal management Power suppliesOptics Remote phosphor Improved efficiency – better ability to tune phosphor Limits color shifting over time Plasma / MEMs cooling Enables supply chain and manufacturing efficiencies Reduces material cost Improves aesthetics Reduces mass Onboard power supply Dramatically fewer components Reduces material cost Higher reliability Smaller form factor Longer lifetime Better performance MEMs optics Improves LED lighting product performance Enables more and dynamic control of beam 15

17 DRAFT ~50 R&D professionals with advanced degrees 124 issued and pending patents Space Coast location LSG is a driver of technological innovation for lighting, as reflected by its strong partnerships Collaboration with technology partners has broadened technical expertise and enhanced ability to anticipate and address novel applications for LED lighting The partnership between Lighting Science and Google has produced a ~$35 LED bulb expected to be in stores by the end of the year The bulb builds in low- cost wireless networking for Android and can be wirelessly controlled by any Android device 16

18 DRAFT Technology expertise and system integration capabilities in place to improve efficacy Shifting production to lower labor cost geographies Relationships with strategic vendors to reduce material costs Partnership with Dixon Technologies to expand into Indias $1.8 billion lighting market Partnership with Shanghai Automotive to bring high performance, low cost LED infrastructure lights to Eastern China Drivers of growth strategy Lead the innovation of lighting applications through intelligent controls Exploit the ubiquity of lighting and market shift toward energy-efficient lighting Broaden product portfolio to address larger universe of applications Continue to drive adoption of LED general lighting products by continually improving performance and reducing cost Expand internationally through partnership strategy Enhanced investment in sales and distribution channels Example: ~$35 LED bulb that can be controlled wirelessly by Google Android devices The worldwide general lighting market is vast, at ~$100 billion today LED market share of general lighting market expected to grow rapidly Rapidly introducing new SKUs with 59 introduced in 2011 YTD Product portfolios across all segments are being expanded Added experienced lighting professionals to direct sales force and the sales team that manage retail and OEM partners Current pipeline of sales opportunities: over $100 million and growing 17

19 DRAFT Strong management team Jim Haworth 18 years of lighting industry experience in marketing, operations, manufacturing and general management Vice President of marketing and strategy at Philips Lighting President and CEO of JJI Lighting Group Leading mind in the science and technology of lighting Founder of Lighting Science Group 38 patents in the field of solid state lighting Selected as a Champion of Change by the White House in May 2011 15 years of senior-level experience in accounting positions at public companies Vice President and CFO of internal division at HD Supply Assistant Corporate Controller at Hughes Supply 10 years of production and logistics experience managing manufacturing operations in automotive, electronics, furniture and metals industries Senior operating positions at Acuity, Delphi, Shapes and Rowe Fine Furniture 11 years of experience in product development and engineering Director of Product Management and Engineering for Acuity Brands Lighting, Holophane Division Engineering Manager at Thomas & Betts Experience in a variety of technology organizations in multiple industries, including automotive and remote asset management COO of StreetSmart Technology VP and GM for Acuity Brands ROAM business 27.133.182 106.169.78 244.156.62 222.117.114 178.194.209 146.73.158 0.56.104 Charts Greg Kaiser David Henderson Fred Maxik John Stanley Edward Russ CEOCTO & Founder CFOCOO CDOCBDO 18

20 DRAFT Investing for continued & long-term growth Investments and new-hires in sales & marketing Enhanced balance sheet improves commercial relationships and partnerships Continued investments in technology and product innovation Strong revenue growth LED penetration driving massive TAM growth LSG continuing to expand channel relationships and introduce new products, capturing market share Increasingly strong indications from customers focused on ramping volume and expanding LED product range Demonstrable path to margin improvement LSG developed supply chain to anticipate surging demand Manufacturing efficiencies and shift to lower-cost geographies Design improvements along with reduced materials costs Opportunity to leverage existing operating cost structure for expected ramp-up in sales Attractive financial model 19

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