Investor Presentation

6/30/2009By Larry Frew

Confidential

Table of ContentsBusiness & Industry Overview Current Challenges & PEI SolutionPEI Advantage & Market OpportunityTransaction & TimelineAppendix

Business OverviewPrevailing Energy, Inc. ("PEI") is an innovative

renewable energy technology company that is currently developing and commercializing the world's first economically viable and scalable Vertical Axis Wind Turbine Generator ("VAWTG") electricity generation system.

Benefits of VAWTG Technology:energy bill reducinglow-costreliableeasily scalablenon-pollutingaesthetically pleasingsilent & safe renewable energy

Industry OverviewThe rapidly growing small wind generated electrical market is currently served by the traditional prop-driven, Horizontal Axis Wind Turbine Generators (HATGs). As the market grows it has great potential to overtake other energy markets.

Industry OverviewThe state residential small wind incentives have grown over the past years

Noisy Propeller driven turbines

City zoning height requirements

ROI is very long, 8 to 15 years or more

Priced at $12,000 to $30,000 per HATG

High wind speeds of 12 MPH required

Turbines kill a number of birds & bats each year

High maintenance costs due to system’s complexity:

components to control blade pitch

brushes, belts, gears

cut-in and cut-out speed control mechanisms

special machinery to stay pointed into the wind.

Not scalable:

New systems needed to meet future growth demands

Current ChallengesThe traditional prop-driven, Horizontal Axis Wind Turbine Generator (HATG) suffers from numerous growth barriers.

Problems with this technology:

Turbines can only operate at 50-100 ft.

Runs silent – ideal for any urban setting

Zoning requirements: operates at 30 ft high or lower

Short ROI: 0-5 yrs. depending on wind speeds & rebates

Price ≤ $5,000 and many state rebates will pay total cost

Operates at wind speed ranging from 2 - 150 mph Safer for birds and bats; blades are visible at all

times Low maintenance costs due to system’s simplicity

PEI systems scale from 1kw to 1Mw cost-effectively

PEI SolutionThe new place-anywhere, Vertical Axis Wind Turbine Generators (VAWTGs) eliminate growth barriers and open up energy & cost saving opportunities.

Solutions found in our technology:

Turbines can operate at 30 ft.or lower.

PEI Solution

SolarWorks great with existing solar systems. When the sun is shining, solar power systems are working; when its cloudy and at night, wind power systems are working.

Patent Details The VAWTG is based on proprietary air-foil/winged shaped blades made of

composite materials and special type of Permanent Magnet Generators designed and invented by Mr. Larry Frew.

A Patent Application has been filed by PEI, Application No. US-2007/0126406 A1, covering all the innovative features incorporated by Mr. Frew into the VAWTG.

The VAWTG, with its configuration of omni-directional blades, can easily convert the entropic wind energy into highly stable, grid-quality electrical power.

PEI will control the IP for VAWTG technology in 52 countries world wide.

Proprietary system designs and embedded firmware are key barriers to entry.

Multiple patents are pending and being pursued on specific hardware and overall system components.

PEI Advantage – First Mover

Market OpportunityVAWTG target markets:

• 1.3 billion home owners world wide (128 million in US)• 3,000 wind dealers around the world• 7,000 solar dealers around the world

Market OpportunityClients

California test market Residential property Commercial facilities Dealer network

RevenueAfter commencing production, management estimates first

year revenue at $6,250,000.00 million (1,000 units at an average price of $6,250.00)

Year two revenues estimated at $31,250,000.00 millionProfitability

At a volume of 5,000 units, per unit price is estimated at $6,250

With an increase to 10,000 units, the piece price falls to $5,000

Schools - CA state rebates & PPA

Government facilitiesComplements solar systems

Proposed TransactionPEI is seeking $43 million in total financing

Secure patents worldwide (24-36 months): $400,000Complete prototype testing (6-9 months): $600,000Complete first article (6-12 months): $2,500,000Establish production facilities (6-12 months) and

Manufacturing capability: $36,500,000 Set up sales and marketing (6-9 months): $3,000,000

R & D, first round, We will have a small support staff to facilitate management and the various required groups: Mechanical and electrical Engineering, Drafting and PCB design and preliminary manufacturing staff

Manufacturing ,The second round of funding will establish the Manufacturing. It will include the tooling and Automatic Testing development, the Quality Group and Shipping and receiving.

Horizontal vs. Vertical

Vertical Detail

Potential Applications

Corporate OrganizationCEO/President

Larry Frew

Comptroller/Secretary

J ohn Sandberg

VP/ Director ofMarketing-Sales

Tom Quick

Dir of PurchasingCari Winter

CTOLarry Frew

Dir of EngineeringLarry Frew

Dir of ManufacturingTBD

TBDHR/Personel

Purchasing &Inventory

Dir of QualityTBD

Insurance

Mechanical EngineerTBD

PCB DraftingTBD

Electrical EngineerJ ohn Parretta

FirmwareJohn Parretta

TechTBD

Test EngineerJ ohn Parretta

Sr. MachinistTBD

MachinistTBD

TechTBD

Hardware/Software Test

Business AdvisorStephano Mangano

Marketing V.P. &Advisor to Sales

Robert McCarthy

Development Pipeline