Nextek Power Systems, Inc.

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March 18, 2013 Issue

The Most Powerful Name In Corporate News and Information


With more Buildings Generating their own Power through Renewable Energy Sources and a Greater Focus on Energy Efficiency, Nextek Power Systems, Inc. is in the Right Market at the Right Time bringing to market their Nextek Direct Coupling® Power Distribution Platform providing Direct Current (DC) Power Networks for Buildings

About Nextek Power Systems, Inc.:

Nextek Power Systems, Inc. is a pioneer in direct current (DC) power networks for buildings. The Nextek Direct Coupling® power distribution platform delivers superior efficiency, flexibility, and reliability to interior electrical circuits and on-site power generation.

Paul Savage

Paul comes to the energy technology sector from finance. A graduate of Haverford College with a degree in Philosophy, Savage’s experience includes bond trading at CS First Boston and risk management at Lehman Brothers before joining the start-up operations of the Caterpillar Dealership in Hanoi, Vietnam. At Caterpillar, Savage wore two hats as Director of Marketing and Customer Finance. Savage is credited with helping grow this green-field start-up to 87 employees, 5 offices, and $22 million in sales in two years. Savage is also a founding governing member of the EMerge Alliance™, a member of the Clinton Global Initiative, and a member of the Board of Directors at Winrock International. At Nextek Power Systems, Paul Savage is the architect of the company’s IP, financial, and partnering strategies. Savage leads a comprehensive team of operations and engineering talent both at Nextek Detroit and Nextek New York.


DC Power Supply Company


Nextek Power Systems, Inc.
461 Burroughs Street

Detroit, MI 48202




Interview conducted by: Lynn Fosse, Senior Editor, CEOCFO Magazine, Published – March 18, 2013

Mr. Savage, what is the concept behind Nextek Power Systems?

Mr. Savage: Nextek Power Systems grew out of some thinking that started from the Brookhaven National Labs in New York. Brookhaven is one of the federal labs that does pure research into energy and our cofounder was doing thin film solar research back in the nineties when he had what we think is this major insight into the whole power equation. This recognized two big trends that were coming together then and are more established today, which is distributed generation. More buildings today are generating some of the power they used at the building site and that sits nicely with the increasing density of electronic loads in buildings. There are more and more electronics everywhere all of which consumer direct current. Direct current is what all these distributed and renewable technologies produce. We make a path to directly couple the source to the load and avoid the AC to DC conversions that plague most of our buildings today.


CEOCFO: Would you tell us a little about the industry in general?

Mr. Savage: Energy efficiency which is popular today and it is going in and out of vogue but as electricity prices have gone up and stayed up, energy efficiency has gotten to the top of the list for building owners and companies that pay those bills. It is primarily about energy efficiency but our DC microgrid technology also has flexibility benefits where it is easier to reconfigure as well as safety benefits. Our low voltage systems operate below the shock hazards and the startle hazards and therefore make electrocution impossible. There is more interest on having digital power that is up all the time and that is easier to accomplish in the DC domain, so we regard the status quo as our competition. We have about thirty patents worldwide that protect our systems and method of bringing DC power into the volt environment.


CEOCFO: What have you figured out that others have not?

Mr. Savage: These days I see a great deal of graphics in the press and the promotions of other companies that imply a recognition of what is going on. I would say our insight boils down to the understanding that we live in a DC world and we have increasingly since the nineteen fifties introduction of the semiconductor. The semiconductor is an intrinsically DC consuming device. Our load has been changing. Before I was born, there was nothing electronic and these days it is more than half the load. Over the past 60 years there has been a massive shift in how we use electricity. We recognized that early and I would say we have been early for about ten years, but we are on time today.


CEOCFO: What was the hardest piece of the puzzle to put together?

Mr. Savage: The trying thing is the belief in what you are doing when you are not getting the traction. In a broad area like electricity, there are not many innovations that have been able to move the needle in electrical power efficiency, especially ones that are basic innovations like ours. It is believing in the paradigm and remaining persistent.


CEOCFO: Are the people that should know about Nextek Power Systems aware?

Mr. Savage: We have made a great deal of progress in that regard but I would not say we have the profile we deserve yet. We were recently very pleased to nationally release a Net Zero Bank branch that we helped PNC Financial design and build down in Fort Lauderdale Florida. That is the kind of nationally recognized customer that we hope will get Nextek Power Systems in the minds of people.


CEOCFO: How are you going to get in front of people?

Mr. Savage: We are hoping for the large partners and customers to use us as an expression of their leadership around these issues for green sustainable and highly efficient buildings. We have a partner Johnson Controls who are using us as a domain expert in the DC area. We go along with them as a solution offered by JCI Design and Construction. Armstrong World Industries the people that make suspended ceiling systems have over half the market and they are one of our partners in the distribution of these DC microgrids for buildings.


CEOCFO: Do you see DC power and energy efficiency taking the forefront again in the next few years?

Mr. Savage: I think practitioners in the industry have always known that the first job at a building is to make sure you have minimized the load in the first place before you start greening up its sources. This is because you will quickly get behind the eight-ball in terms of the economics of the project if you do not first shrink the load to its minimum before you start planning your energy strategy. I think that understanding has gotten out of the minds of the practitioners. When you get the awareness of building owners and operators that understand that all these strategies make better sense when you have done your work on the efficiency side of things, then it bodes well for us and is the way things are going.


CEOCFO: Do you see more installations in new buildings or retrofits?

Mr. Savage: Certainly, there have been more retrofits over the last couple of years than there has been new building. Something like 80% of all the buildings that will exist in 2030 are already here, so the biggest opportunity is the retrofit market, which is not to say that we are not interested in new buildings but it is very important to get the existing building stock converted into more flexible systems. These systems can adapt more without having to be scrapped for every renovation.


CEOCFO: Does Nextek Power Systems have adequate funding to continue to get the attention you need?

Mr. Savage: I have been a significant part of our financing. We have a couple of other large outside investors. Two of our investors are from Texas and have been successful in the conventional energy business and they are using their investment into us as a way to stay relevant for the future energy systems. We will continue to invest in our business through the end of this year 2013 and we expect we will be cash flow positive at the end of this year.


CEOCFO: Why should the business and investment community pay attention to Nextex Power Systems?

Mr. Savage: Everyone is looking for ways to get relevant in the whole green renewable sustainable phenomenon. Our platform is unique in that we bring the distributed resource like solar in its native form, which is direct current into a DC power distribution system in the building to which all the critical loads are attached. Typically, a manufacturer is finding themselves’ taking parts out of their product to make them compatible with our systems which means they are going to lower their bill of materials and raise their efficiency at the same time. We are a uniquely cost effective way to get relevant in the green renewable sustainable phenomenon.


CEOCFO: What should people remember about Nextek Power Systems when they read your story?

Mr. Savage: What I am excited about is something that has become clear over the last year, which is the recognition that these systems we are providing for buildings are dramatically cheaper to control and this is an area that has been very expensive. We reckon less than 10% of the built environment is operated with wireless controls. It is very different in the commercial and industrial space than it is with wireless gadgets that you would have at home. It is not as common to find wireless strategies in the commercial industrial space. We discovered along with some of our controls partners that there are some unique facets of our technology that make implementing wireless control strategies dramatically cheaper and less than half the cost. We think that will be a big part of what drives the adoption of our systems into the future.


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“Over the past 60 years there has been a massive shift in how we use electricity. We recognized that early and I would say we have been early for about ten years, but we are on time today.”- Paul Savage


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