FrequentlyAsk kedQuesti ions(FAQs s) January2012

C COMPANY Y AND SO OLUTION

1. WhatistheCoolEn nergysolution? CoolEnergyhasdev velopedathe ermaltoelec ctricalpowerg generationsy ystemforthe econversiono ofwasted heatfr romenginesand a industrialprocessesin ntocleanelec ctricity.Thiss systemisbuiltaroundaninnovative advanc cedmaterials sStirlingenginecalledthe eSolarHeart Enginewhichconvertslo owtemperatu ureheatto electricity. 2. HowcanIobtainaSolarHeartEngine E ? CoolEnergyiscurre entlydeliverin ngpilotstage e3kWengine estoqualified devaluationc customers.O Oncethe pilotte estingphaseiscomplete,Cool C Energywill w beselling gthesystemsthroughcert tifieddealers. .These dealer rswillbetrain nedintheope eration,installationandm maintenanceo ofthesystem m.CoolEnergy ywill mainta ainapublishe edlistofthecertified c dealersonthewe ebsite(www.coolenergyin nc.com). 3. Whenwillthesyste embeavailable? Generalavailability ytothepublic cthroughace ertifiedCoolE Energydealerwillbeappr roximatelylat te2012. CoolEnergywillbeplacingalimitednumberofpilotsyste emsforqualif fiedfieldtrialsbetweenno owand Mid20 012.Thesepilotsystemswill w requirefin nancialcomm mitmentonth hepartofthepartnertote estthe engine es,andtosha arethetestda atawithCoolEnergy.

C Cool Energy, I nc. 5541 C entral Ave, #172 # Boulde er, CO 8030 01 tel (303 ) 4422121 fax (303) 4 4420820 www.co oolenergyinc. .com

Cool Energy Frequently Asked Questions, Dec 2011 4. WhatisthecostoftheSolarHeartEngine? Weestimatethemarketcostofthe3kWenginetobe$8,000$12,000USDinproductionquantitiesof 1,000peryear. 5. Whatenginesizeswillbeavailable? Theenginesizecurrentlybeingtestedisa3kWeengine.A20kWengineiscurrentlybeingdesigned,and evenlargerenginesareplannedforthefuture. 6. Willthissystemqualifyforcreditsorincentives? Dependingonthesourceofthermalenergy,thesystemwillqualifyforaUnitedStatesfederaltaxcredit ashighas30%.Manystates,citiesandmunicipalitieshaveotherincentives.Foradetailedlistof incentivesintheU.S.,pleaserefertohttp://www.dsireusa.org.ManyprovincesinCanada,andcountries inEuropehaveelectricitygenerationincentivesorfeedintariffs. 7. HowdoIknowiftheSolarHeartEnginewillworkformyapplication? TheSolarHeartEnginecanbeusedwithanyheatsourceintheenginesoptimalinputtemperaturerange of100300C,andheatflowrangeof40150liters/min.

TECHNOLOGY
1. WhatistheCoolEnergytechnology? ThesystemisbasedontheSolarHeartEnginewhichisaStirlingEngine(Inventedintheearly1800sby RobertStirling).TheStirlingengineisaheatenginethatoperatesbyexpansionandcompressionofairor othergas(calledtheworkingfluid),atdifferenttemperaturelevelssuchthatthereisanetconversionof heatenergytomechanicalwork.TheCoolEnergySolarHeartusesnitrogenastheworkingfluid,andis drivenbyrelativelylowtemperatures(100C300C).Themechanicalworkgenerateddrivesagenerator (builtinsidetheengine)thatcreateselectricalpower. 2. 300Cistoohotforwater.WhatistheheattransferfluidintheSolarFlowSystem? TheSolarFlowSystemusesamineraloilbased,foodsafeandnontoxicheattransferfluidwhichisrated to340C. 3. DoestheSolarHeartEnginemakenoise? BecausetheSolarHeartoperatesatalowspeed(600rpm),hasnointernalexplosionsandisfully balancedtheengineisextremelyquietandlowinvibration. 4. IstheSolarHeartreliable? TheSolarHeartEngineisdesignedfora70,000hourmaintenancefreelife.Thereisnolubrication requiredasallbearingsaresealed.

Cool Energy, Inc. 5541 Central Ave, #172 Boulder, CO 80301 tel (303) 4422121 fax (303) 4420820 www.coolenergyinc.com

Cool Energy Frequently Asked Questions, Dec 2011 5. Howmuchheatandelectricitycanbegenerated? Thechartbelowshowsthemodeledpoweroutputforgiveninputtemperatureandflowrates.Testingis currentlyongoingtodeterminehowwellthe4thgenerationenginesmatchthesedevelopmentmodels. Hot OilFlow Electrical Thermalto Side Rate Output Electrical Input (liters/min) Power Conversion Temp (Wdc) Efficiency (C) (%) 100C 40 579 6.4% 100C 75 639 7.0% 100C 110 658 7.2% 100C 150 667 7.3% 150C 40 1288 12.9% 150C 75 1345 13.4% 150C 110 1362 13.6% 150C 150 1370 13.7% 200C 40 1911 17.8% 200C 75 1965 18.3% 200C 110 1981 18.4% 200C 150 1989 18.4% 250C 40 2462 21.6% 250C 75 2512 22.0% 250C 110 2527 22.1% 250C 150 2534 22.1% 300C 40 2954 24.6% 300C 75 3000 24.9% 300C 110 3014 25.0% 300C 150 3020 25.0%

BUSINESS
1. WhattypeofbusinessisCoolEnergy? CoolEnergyisaprivatelyheldcorporation,basedinBoulder,Colorado. 2. HowisCoolEnergyfunded? Todate,CoolEnergyhasbeenbackedprimarilybyangelandventurecapitalinvestmentandhas receivedseveralSBIRgrantsfromtheNationalScienceFoundationandtheEnvironmentalProtection Agency,aswellasaDepartmentofEnergysubcontractandaColoradoGovernorsEnergyOfficegrant. CoolEnergyiscurrentlyraisingitsSeriesBroundofcapitalforthepurposesofbeginningvolume manufacturing.

Cool Energy, Inc. 5541 Central Ave, #172 Boulder, CO 80301 tel (303) 4422121 fax (303) 4420820 www.coolenergyinc.com