Founded in 2002, QuantumSphere, Inc. (QSI or the Company) is a world leader in the manufacture and development of award winning nano catalysts and integrated catalytic solutions, backed by over 50 patents issued and applications pending. QSI products address high-value commercial applications across a range of carefully selected multi-billion dollar clean energy and power storage markets, with customers in emissions reduction, chemical production, batteries, and fuel cells. QSI's catalysts have demonstrated breakthrough results, reducing costs and increasing efficiency in the generation, storage, and use of energy and the production of key chemical end-products and intermediates.

According to industry estimates, more than 80% of the world's large-scale chemical processes depend on catalyst materials, including petroleum refining, pollution abatement, and production of fuels and chemicals. Catalysts are now seen as one of the preferred ways to improve process efficiency, lower costs, increase output, and meet both performance and environmental standards. This is placing a strong emphasis on the development of new catalysts with higher activity, increased longevity, and reduced environmental and/or health impact.

QSI's high-performance catalysts, components, and chemical processing expertise have provided the Company and its partners with significant competitive advantages. Resulting products used by industry leading companies in multi-billion dollar and high-growth markets include: emissions reduction for transportation and stationary catalytic converters; chemical production for ammonia and other high-value industrial chemicals; and energy storage for batteries and fuel cells. QSI has successfully leveraged its core technical abilities and business strategy focused on customer driven innovation, creating partnerships and generating revenue with global leaders. QSI is poised for expansion and profitability as multiple customer applications are being launched or are in development.

The Company is working with investment bankers to secure equity funding in order to expand sales and marketing efforts for its current products, further expand production capacity, and accelerate critical future product initiatives.

QSI's integrated catalytic solutions generate multiple revenue streams through a combination of material, component sales, and intellectual property licensing. With this flexibility, QSI is able to work closely with its key partners to maximize the potential of each opportunity while mitigating risk and delivering shareholder value. Click here to learn more and view the Company's introductory video (turn up your speakers): www.qsinano.com/intro

QSI follows a disciplined marketing strategy by engaging only in specific sectors and only when securing access to industry-leading application development experts and market-leading customers. QSI products provide both high value to customers and high margins to QSI. This focus has resulted in multiple products not only validated but also accepted by lead customers currently or positioned to drive further QSI growth. Selected examples include:

Emissions Reduction - Transportation and Stationary Catalytic Converters
Increasingly stringent air quality regulations enacted at the federal and state levels have accelerated growth in the emissions control market and are driving the industry to develop new and improved methods to reduce greenhouse gasses and other toxic pollutants - in particular, airborne particulates (soot) and NOx (nitrogen oxides). Many of the catalyst-based solutions adopted by the industry today make use of expensive Platinum and Rhodium precious metals - increasing costs for both the manufacturer and end user. QSI's ability to deliver comparable performance using much less expensive nano-Palladium and other nano-metal catalysts is causing significant excitement with our industrial partners. In certain applications, QSI has demonstrated up to 35% lower costs with a corresponding 25% greater efficiency in pollution conversion over competing technologies. Multiple prospective customers are engaged.

Chemical Production - Ammonia Synthesis
Ammonia production is a highly critical and energy-intensive process. The 100+ billion dollars of ammonia produced annually consumes more than 2% of the world's energy supply. 85% of this output is used as agricultural fertilizer for both food (supplying 50% of all human protein consumed), and non-food crops including biofuel feedstocks. In addition, ammonia generation produces 400 million tons of greenhouse gasses, or 1.6% of the world's total carbon dioxide emissions, annually. By lowering the reaction temperature and pressure and increasing overall conversion efficiency, QSI's turbo-charged iron catalysts have the potential to increase ammonia production output per plant by up to 20%, which the industry considers to be a "game changer". At scale, this breakthrough promises not only significant energy and infrastructure savings to the 100 year old Haber-Bosch process, but also compelling improvements in the net output of both food and fuel production. It can generate $100+ million in annual revenue for QSI and its partners. Commercialization is underway with one of the oldest companies in the field of synthetic ammonia production and a leader in plant design and revamping.

Energy Storage - Battery and Fuel Cell Catalysts and Components

• Metal Air Batteries: QSI is generating revenue from disposable and rechargeable consumer and grid-level storage batteries through its advanced air electrode technology. QSI's high-performance catalyst and proprietary air electrode design provides a 20-30% power increase, enabling smaller, thinner, and lighter batteries with higher power output. Multiple customers and partners are engaged.

• Nickel Metal Hydride Batteries (NiMH): QSI has demonstrated a 10% increase in capacity through the integration of QSI nickel catalyst into NiMH battery electrodes. Through QSI's strategic partner, OM Group, China's largest battery manufacturer is validating QSI's technology, and commercialization is underway.

• Direct Methanol Fuel Cells (DMFCs) and Alkaline Fuel Cells (AFCs): QSI is also generating revenue from the sale of its high-performance DMFC membrane electrode assemblies for use in portable military devices, incorporating QSI palladium that reduces the use of expensive platinum metal while improving peak power 20-50% at high fuel concentrations. Commercialization is underway with DMFC partners and the U.S. Military. Revenue is also being generated from the sale of QSI-Nano® catalysts for AFCs, eliminating the use of platinum catalyst.

Potential competition may come from large companies such as Dow Chemical, BASF, and Johnson Matthey, as well as smaller specialty suppliers with more limited capabilities. However, to QSI management's knowledge, no other company can match the nanoscale size, cost, uniformity, and performance of QSI products or deliver in comparable volumes. Examples of differentiation follow:

Patents: QSI's competitive advantages in nanocatalysts production and development of multiple end-use commercial products are backed by more than 50 high-value patents (issued and applications pending).

Recognition: QSI products have won multiple awards including the Frost & Sullivan North American Product Innovation Award for QSI's battery electrodes (2009), the Small Times Magazine Award for Best of Small Tech Nanomaterial of the Year Award for QSI's manganese catalyst (2007), and the Frost & Sullivan Innovation of the Year Award for its Patented Manufacturing Process (2005).

Scale: QSI is ISO 9001:2008 certified and has one of the largest volume capacities (of nano metal catalysts) capable of producing up to $20 million of product annually at current prices. Each reactor is automated, continuous, scalable, and requires modest capital expenditure.

Safety: Setting the benchmark in safety, QSI has worked diligently with representatives from OSHA, NIOSH, DTSC, CAL EPA, and UC Irvine to ensure that its manufacturing and material handling processes exceed the highest safety standards.

Strategic Relationships: QSI is engaged in strategic programs with a number of leading corporations including specialty metals and chemical company, OM Group, Inc. (NYSE:OMG, www.omgi.com), global battery, automotive, and chemical manufacturers as well as defense contractors and various universities and industry experts.

QSI has assembled a deep and experienced technology and business team that has successfully introduced products to market with high capital efficiency.

• Kevin Maloney, MBA - CEO, 16 yrs sales, marketing, and finance. PIMCO, First American Corp.
• Jason Norman, Ph.D. - CTO / VP, Bus. Dev., 18 yrs R&D, industrial process, and strategy, BOC
• Patrick Deane, MBA - CFO / COO, 20 yrs public & private finance and operations, VitalStream ITB
• Douglas Carpenter, Ph.D. - Co-founder, Sr. Scientific Advisor, 30 yrs materials expert, inventor
• Fabrizio Rinaldi, Ph.D. - Dir. of Emissions Control, 16 yrs catalysts expert, Tenneco, Engelhard
• Kimberly McGrath, Ph.D., MBA - Dir. of Fuel Cells, 10 yrs materials and process chemistry expert
• Vito A. Canuso III, Esq. - VP, Intellectual Property, 20 yrs IP litigation / portfolio experience
• Gregory Hrncir, Esq. - General Counsel, 16 yrs corporate, securities, M&A, start-up experience

QSI has demonstrated a high degree of capital efficiency, with financing secured to date totaling nearly $20 million. Existing investors include, among others, a large strategic public company, OM Group, Inc. (NYSE:OMG), an institutional investor, Bricoleur Capital and several grants received from various branches of the U.S. Government.

Kevin D. Maloney, CEO, kmaloney@qsinano.com; (714) 545-6266; www.qsinano.com

Catalyst Footnote: A catalyst is a substance that increases the rate of a chemical reaction by reducing the required activation energy. In addition to speeding up certain chemical reactions, catalysts also can be used to alter the temperature and pressure at which various thermal and elctro-chemical reactions take place and, thus, make them more efficient. Nanocatalysts represent the convergence of catalysts, a mature technology, with a new one, nanotechnology. Nanocatalysts are nanoscale materials (typically under 100 nanometers in size) that have been subjected to nanoscale structural modification in order to enhance their catalytic activity by increasing the active surface area, resulting in unique physical properties with superior performance.

The extent of the catalyst market may not be apparent to the casual observer because catalysts are mostly used in intermediate processing steps, but catalysts are a multi-billion dollar industry. Current global catalyst markets are in excess of $12 billion annually. Nanocatalysts sales are projected to reach $6.0 billion by 2015 and will play a critical role in reducing costs and increasing efficiency in the generation, storage, and usage of energy. Sources: Freedonia Group, Global Industry Analysts, Inc.

Investment Disclaimer: The QSI business description above is not an offer to sell securities nor a solicitation of an offer to buy securities. Securities offerings may be made only in transactions registered under applicable federal and state securities laws, and/or securities laws of your country, or exempt there from.