Suganit Systems. Inc.

Suganit Systems, Inc. is a Reston, Virginia-based start up company involved in the research
and development of renewable and clean energy. Suganit’s goal is to help develop
economically viable technologies for renewable energy production. In keeping with this goal,
in one of our thrust areas, we have been doing research in producing ethanol from biomass.
This is a particularly attractive path to renewable energy since it helps rural and farm
communities regain their economic vitality, while at the same time providing an abundant,
alternative source for the insatiable need for transportation fuels. The Hobson’s choice
between affordable food for humans versus fuel for automobiles will also be side-stepped
through this approach.

Only 13.1% of the world’s energy needs are currently met by renewable resources and
the rest of the 86.9% are met by non-renewable resources [IEA Renewable Fact Sheet,
January 2007]. 79.4% of the renewable resource usage is from combustible biomass
and 16.7% is from hydro-electric power. Combustible biomass is almost exclusively used
in the under-developed regions of Asia, Africa and Latin America, for cooking and
heating purposes. With the rapid development of countries like India and China, the
energy needs of the world are expected to double in the next half century. Fossil fuels, as
used currently will not be able to meet the needs for such a growing energy demand.
Additionally, the use of fossil fuels contributes significantly to green-house gas emissions,
which have a harmful impact on the environment. No doubt, the growth of these emissions
needs to be arrested and reduced. Reduction in the use of fossil fuels also increases the
energy security of countries since fossil fuel producing countries are a small number, which
are located in politically volatile regions. As of 2004, the share of bio-fuels for road transport
was less than 1% in the world. US usage stands at 1.3%, while that of India and China is
around 0%. This pattern is not sustainable for continued development and growth in the world.
Several countries are now mandating the blending of ethanol with petrol, and in some
situations, the blending of bio-diesel with petroleum diesel.

Extensive research has been done in developing technologies to convert biomass into
transportation fuels over the past three decades. A main objective of research done during
the 1990s was to develop enzymes that could hydrolyze cellulose into sugars. This enzymatic
hydrolysis of pure cellulose is currently a slow but well established process. However, biomass does not
easily yield pure cellulose efficiently. Some form of pretreatment
needs to be performed to make the biomass amenable to efficient enzymatic hydrolysis. Several
pretreatment technologies currently exist, but have yet to be taken to large scale production.

Starting from 2006, Suganit Systems has funded university research in the US and collaborated
with them in developing a new pretreatment method for production of ethanol from biomass.
This process is more efficient compared to existing methods, and the relative yield of sugars
through enzymatic hydrolysis is high. A related patent application has been submitted to
the US Patent and Trademark Office by the University-Suganit team. Over the next two
years, through this collaboration, we plan to study this new pretreatment process as well as
manufacture of other products from this “sugar platform”.

At the present time, Suganit Systems is poised to take this novel technology and optimize it to
make it suitable for commercial production. We firmly believe that this approach and
technology will provide a viable and cost effective means for businesses to produce renewable,
clean transportation fuels. Other technologies currently being studied at Suganit include
solar energy conversion devices.