deTerra® Biobased Polymers Next Generation Materials for Durable Applications Innovation Takes Root 2012 Dr. Jeffrey Cernohous CTO, Chairman and Founder Helping Innovators Innovate Presentation Overview • Brief overview of Interfacial Solutions • Introduction to deTerra® Biobased Polymers • Next Generation deTerra® Biobased Polymers Helping Innovators Innovate IFS Vision Statement Be the best in class provider of polymer material and process solutions to the plastics industry by: 1. Developing proprietary solutions that offer undeniable value propositions 2. Providing efficient technology development and transfer solutions 3. Operating with the highest level of integrity, honesty, and confidentiality 4. Attracting and retaining world class people committed to our mission. Helping Innovators Innovate Our Mission: Helping Innovators Innovate Our Strength: Delivering Material Science Solutions Quickly Our Record: >$300MM of Customer Sales Enabled in Several Markets Our Business: Flexible Business Models to Meet Customer Needs Intellectual Prop. Creation & Development Products and Contract Services Contract Research & Development Contract Melt Processing Services Contract Manufacturing Scale-Up Contract Laboratory Testing Services Manufacturing Modeling and Transfer Custom Compounding Patent and Know How Licensing IFS Products (deTerra®, Xusto®, Moisture Scavenger) Helping Innovators Innovate Jeff Cernohous, Founder & CTO • Ph.D. & B.S. Organic Chemistry • 30+ Patents Issued • 8 yrs Interfacial Solutions President • 5 yrs 3M Technology Development Gregg Bennett, CEO & Member Brian Szymanski, CLO & Member • Ph.D. Polymer Sci. & B.S. Ch.Engr • 25+ Patents Issued • 20 yrs 3M incl. VP R&D / Clinical Affairs IPD & Genl. Mgr. of 3M Turkey • Juris Doctor & B.S. Ch.Engr • Registered Patent Attorney • 17 yrs IP, incl. 3M Asst. Chief Counsel • 10 Yrs Chemical Mfg Kristi Cernohous, QC Director • Todd Sarnstrom, VP Operations • B.S. Computer Sci., B.A. Bus. Mgmt. • 5+ Patents Issued • 25 yrs production and tech. mgmt • 5 yrs Anagram, 15 yrs Jostens Adam Pawloski, Tech. Director • Ph.D & B.S. Chemical Engineering • 10+ Patents & 35+ Publications • 10+ yrs matls dev., multiple industries • 3 yrs with Interfacial Solutions • • • B.S. Chemistry and Food Science 7 yrs Forensic Evidence – MN BCA 2 yrs Quality Engineer – General Mills Extensive method & instrument dev. Helping Innovators Innovate Headquarters: River Falls, WI (45 minutes from Minneapolis, MN) Founded: 2003 Employees: 30 (14 Technical Degrees, 4 Ph.Ds) Facility: 40,000 sq. ft. Website: www.interfacialsolutions.com Helping Innovators Innovate Technical Compounding • 2 lb Lab Samples • 40,000 lb Truck Loads • 3/4” Single Screw Extruder • 2 x 27mm Lab Twin Screw Extruders • 38, 50, 58mm Twin Screw Extruders • Batch blending • Side stuffing • Liquid injection • Super Critical Foaming • Moisture sensitive materials • Reactive Processing Helping Innovators Innovate Materials Characterization Thermal Analysis •DSC •TGA •DMA •HDT Molecular Structure • GPC • HPLC • FTIR • SEM • Rheological Analysis Physical Characteristics •Color •Moisture •Specific Gravity •Particle Size •Flame Retardant Testing Helping Innovators Innovate Sample Preparation Pellets Injection Molded Parts Blown Films Cast Films Extruded Sheet Foamed Sheet Foamed Pellets Helping Innovators Innovate Our Mission: Helping Innovators Innovate Materials Expertise Process Expertise • • • • • • • • • • • • • • • • • • • • • • Polymers Natural Fibers and Fillers Adhesives Coupling Agents Compatibilizers Polymer Processing Additives Flame Retardants Moisture Scavengers Nanoparticles Biopolymers Foaming Agents Twin Screw Extrusion Reactive Extrusion Super Critical Foaming Cast Films and Sheet Blown Films Injection Molding Pelletizing Grinding Foaming Process Development Costing Helping Innovators Innovate Our Mission: Helping Innovators Innovate Minimize Scale-Up Risks • • • • • • Business Model Understanding Financial Modeling Plant Design Pilot Scale Production Toll Manufacturing Captive Production Models • Technology Transfer Helping Innovators Innovate Our Customers Announced Collaborations 2 Fortune 50 Companies 5 Fortune 500 Companies More Public Disclosures Soon Our Typical Customer 100-300 MM annual sales Privately held Profitable Growth Oriented R&D appreciation Complimentary core competencies Fundamental material science need Helping Innovators Innovate What We Promise • Rapid product development and prompt responses • Full service idea to production capabilities – minimize risk • Best in Class Polymer Science Materials and Process Expertise • Breadth and Experience across multiple markets • Strong Strategic Alliances and Connections • Strong Ability to “Cross fertilization” Technologies Helping Innovators Innovate Our Branded and Proprietary Products • deTerra® Biobased Polymers • Xusto® Natural and Renewable Fiber Composites • Interfacial Solutions Moisture Scavengers Helping Innovators Innovate deTerra® Biobased Polymers Helping Innovators Innovate deTerra® Biobased Polymer Product Line • deTerra® is the trade name given to a series of biobased hyperbranched polymers developed and manufactured by Interfacial Solutions • Based on polylactic acid (PLA) polymer • The deTerra® product line is based on high biobased product content (> 80%) Helping Innovators Innovate deTerra® Product Line • Initial grade developed for building and construction industry – non-halogenated FR grade to meet UL 723/ ASTM E-84 class 1/A • FR grades to meet UL-94 class V-0 rating • Considered as a “green” alternative to PVC and FR grades of PA, PP, and ABS • High impact grades • Extrusion and molding grades Helping Innovators Innovate deTerra® Biobased Polymers Currently sold or sampled into • Molded articles • Extruded articles • Flame retardant articles • LEED certified buildings • Consumer goods • Appliances Example articles made using deTerra® • Electronics • Others Helping Innovators Innovate deTerra® Molecular Characteristics deTerra® Characteristics • Reactive extrusion process • Hyper-branching chemistry • Major increase in Mz and Mw • Patents pending • Tailored rheology Helping Innovators Innovate Melt Strength Natureworks 2003D deTerra® XP759 Helping Innovators Innovate deTerra® Biobased Polymers Next Generation Helping Innovators Innovate Key Development Opportunities-PLA • Improving impact strength • Improving UL94V FR performance • Improving melt strength • Improving heat resistance (HDT) • Expanding to other biopolymers (PHA) Helping Innovators Innovate Impact Strength-Unnotched Izod 50 43.0 45 40 35 Unnotched Izod (ft-lbs/in) 30 25 20 15 10 10.5 11.0 XP696 XP345 8.0 4.5 5 0 Ingeo 2003D PLA PR146 deTerra® FR Wall Protection deTerra® FR Molding XP698 deTerra® High Impact Helping Innovators Innovate Impact Strength-Notched Izod 18 16.5 16 14 12 Notched Izod (ft-lbs/in) 10 8 6 4 2 0.3 0.7 0.7 1.0 PR146 XP696 XP345 XP698 deTerra® FR Molding deTerra® High Impact 0 Ingeo 2003D PLA deTerra® FR Wall Protection Helping Innovators Innovate UL94 Flammability Grade Biobased Content (%) Specific Gravity (g/cc) E84 Results UL94 V Results UL94 H Results Limiting Oxygen Index PR146 93 1.25 0 Flame Spread, <70 Smoke Index V2 HB 24 XP345 76 1.30 Not Determined V0 HB 28 XP696 93 1.26 Not Determined V2 HB 23 Ingeo 2003D 100 1.24 Not Determined Not Rated HB 22 • • • • • High biobased content for all FR deTerra® grades Comparable specific gravity to PLA Outstanding E84 fire ratings and characteristics V2 and V0 deTerra® options for molding and extrusion LOI results correlate with flame performance observed Helping Innovators Innovate deTerra® Biobased Polymer Property Summary • • • • • Grade Biobased Content (%) Specific Gravity (g/cc) Flexural Modulus (psi) Flexural Strength (psi) Notched Izod Impact Strength (ft-lbs/in) Melt Flow Index (g/10 min @ 190C, 2.12 Kg) PR146 93 1.25 450,000 12,000 0.8 1.0 XP345 76 1.30 500,000 11,200 0.95 18.0 XP698 85 1.25 330,000 8,600 16.5 28.0 XP696 93 1.26 460,000 12,600 1.2 1.0 Ingeo 2003D 100 1.24 400,000 14,000 0.3 7 FR deTerra® grades offer excellent flexural strength and modulus Comparable specific gravity to PLA The impact strength for deTerra® FR grades are improved vs PLA Injection molding grade has impact performance comparable to PVC deTerra® melt flow index/rheology can be tailored for extusion or molding Helping Innovators Innovate Future Development Challenges Helping Innovators Innovate Challenge 1-Thermal Resistance 4500 Generation 1 deTerra® PR146 4000 3500 Storage Modulus (MPa) 3000 2500 2000 PETG 1500 1000 500 0 25 35 45 55 65 75 85 95 Temperature (°C) Helping Innovators Innovate Challenge 3-Impact Strength 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 deTerra PR146 PVC PETG Helping Innovators Innovate Challenge 2-FR + Impact Material Notched Izod Impact (ft-lbs/in) PVC ~15 PETG ~10 PR146 ~1 Helping Innovators Innovate Challenge 3-Economics 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 deTerra PR146 PVC PETG Helping Innovators Innovate Next Steps Other FR Biopolymers (PHA) Improved FR/Impact Combo Improved Temperature Resistance Helping Innovators Innovate