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Smartcube Packaging Systems Company Overview


Contents • Manufacturing Sites. • How The Smartcube Bag Works. • Features & Benefits – Increased sales. – Reduced waste and damage. – Reduced transportation and storage.

• Smartcube vs. Rigid Pail or Jugs. • Smartcube vs. Stand-up Pouches • Special Smartcube Bag Features. – High-end graphics – Reclosures • Flip-top lid • Tin-tie • Zippers


• • • • •

- Handles - Air removal devices - Pour or scoop - Inner ring scallops Available Film Structures. Product Quality. Production Quality. Filling Machinery. Next Steps Forward for Neo Energy.


Manufacturing Sites • Bentonville, Arkansas, USA • Guangzhou, China


How the Smartcube Works Top View

For illustration purposes there is white product in the center chamber of the Smartcube verses the black product in the 4 corner chambers. The view shown is a top view of an actual bag. The Smartcube bag utilizes approx. 93% of the cubic area available.

Force Diagram

80% of the product is placed within the inner ring (center chamber of the bag) depicted by the red circle. The form of the product pushes outwards as indicated by the red arrows. The internal forces pushing outward are then redirected laterally as indicated by the black arrows. Without the internal support to the bag it would balloon.

Smartcube® Stands-up Under Load The metal plates weigh 191 lbs (12 x’s the 15lb bag wt.) While not scientific proof, this is an indication of how the bottom could respond when stacked 12 high, eg 2 pallets with 6 layers per pallet. Structure is a 3-mil poly/poly.

Smartcube Bag

“Other” Square Bag

The competitors bag has 64lbs stacked on top of it & shows substantial bulging on all sides. While not scientific proof, this is an indication of how the bottom bag filled with this material could respond when stacked with 1/3rd as much product by weight. Significant distortion of the bags shape has occurred which could give rise to pallet overhang & load instability. Structure appears to be a 6-mil Polyester.

The bags used in this illustration were purchased at retail solely for the purpose of conducting this comparison. The purpose of this comparison is to illustrate certain characteristics of the packaging. Nothing is to be inferred regarding the quality of the contents of the package. Chef’s Blend is the registered trademark of SOCIETE DES PRODUITS NESTLE S.A. CORPORATION, PENNINGTON & TRI-PLEX are the registered trademarks of PENNINGTON SEEDS, INC. SMARTCUBE is the registered trademark of SMARTCUBE Packaging Systems.


Features and Benefits

• Increased Sales • Standup presentation gives “instant billboard”. • Ready-made display directly from pallet without the need for a display banner. • High-end graphics. • Window options for product visibility. • Customer friendly: Handles, reclosures, less bulk. • Improve your sustainability score. CAT LITTER “Use of the Smartcube packaging concept has increased our sales by over 200% over the past 2-years and has enabled us to go ‘nationwide’ with a major pet store retailer.” Aaron Westcott Plant Manager Precious Cat


• Reduced Waste and Damage • Sized exactly to pallet dimensions eliminating overhang. • Bag construction and design enables 80% of product to be housed in 2 layers of film. • Stands-up under load. • Co-ex structures are able to be engineered specifically for purpose using an extremely wide range of materials. -A major US Pet-food manufacturer saw their large dog-food bag damage rate in the Canadian market go down from 8% – 9% to approach almost zero. -A major US grass seed company reports “ the only broken bags we’ve seen are the ones where the transportation pallet has been hit so hard that the 1” thick wood has broken as well”.


• Reduced Transportation and Storage • 150 – 200,000 empty units per truck load. 25 x’s greater than empty rigid pails 25 x’s fewer trucks and 25 x’s less warehousing. • Cube shape maximizes weight per volume and double and even in some cases triple stacking of pallets is possible during warehousing. Smartcube bag & pallet data Filled Bag Bag Filled Bags Dimensions Height Pallet Size per (Inches) L x W (5 - 20") LxW Layer 6" x 6" 6” 40" x 48" 48 8" x 8" 8” 40" x 48" 30 9.5" x 9.5" 12” 40" x 48" 20 13" x 12" 15” 40" x 48" 12 13" x 16" 20” 40" x 48" 9

Bags # Per Layers Pallet

Total Pallet Height incl. Pallet

9

432

59

7

210

61

5

100

65

4

48

65

3

27

65


Smartcube vs Rigid Pails - Jugs • Reduce packaging & costs by 40% - 70%. • Improve handling of unfilled packaging – 1 truck of empty Smartcube’s can replace 60 trucks of pails. – Warehouse space can be reduced by up to 60 times. – Trucking, unloading & handling can be reduced by up to 60 x’s.

• Increase stacking efficiency by eliminating the air spaces between containers. 20 5-gallon size Smartcube’s can fit per layer.


Smartcube vs Stand-up Pouches • Eliminate the corrugated box. Smartcubes stack well without a box. • Eliminate crushing. – Smartcubes are structurally sound & can be stacked 5 – 6 layers high & warehoused 2 – 3 pallets high.

• Standup without the need for rigid film. Non-deforming cube is derived from design and not films rigidity.

• Decrease your freight costs by eliminating the weight of the corrugated box and getting more product per pallet without fear of crushing.


Special Smartcube Features • High-end Graphics

With or without windows


• Reclosures

Flip top lid


Tin-tie


Zippers

360째 Press-to-close

Slider


• Handles Already present in gable top of bag

Die-cut above seal.

Single flap attached to top of bag


Air removal devices One-way valve(patented)

Air perforation holes (multiple patterns available


Stacking is not a problem!


Pour or scoop


Inner ring scallop holes (aid in filling and emptying bag corner pockets).

Additional inner-ring corner pocket holes to either; Aid product to flow into the center of bag when scooped‌. or Allows wide range of fill heights for the same bag


Film Structures • • • •

Laminated films Surface Printed Scratch Resistant Films Gauge range from 2-mil (50um) to 6-mil (150um). Barrier Films including Co-ex Structures of – – – – –

Nylon Polypropylene High Density EVOH Specialty films e.g. Valeron

• Metalized films.


Product Quality • Every order generates its own Specification Sheet that outlines the exact “agreed upon” bag specifications and tolerances. • 100% product quality guarantee is agreed to relative to this Specification Sheet. • The Specification Sheet is supplied as part of the order confirmation process.


Smartcube  Cat Litter Bag Tolerances Creation Date: Date Issued: Revision Date: Material: Film Supplier:

08/22/08 08/22/08 2mil Poly/ Ink /Adh/2.0 mil Coex XYZ

Tolerances : Ring Height: V-Seal to Ring: Front(L): Gusset 1(W): Back(L): Gusset 2(W): Overlap Bag Length(H): Secondary Hole Punch: Outer Film Gauge: Print (Lateral shift) Edge Seals Valve Handle

Target Min Max 7.25” 7.06” 7.44” 0 -0.19” +0.19” 8.00” 7.81” 8.19” 8.00” 7.81” 8.19” 8.00” 7.81” 8.19” 8.00” 7.81” 8.19” 1” 0.75” 1.25” 18.75” 18.56” 18.94” 1.00” 0.50” 1.25” 4 mil 3.6 mil 4.4 mil 0 -0.25” +0.25” 0.25” 0.30” 0.13” or Pinholes (position specified) (position specified)

Yes or no

Yes or no Yes or no Yes or no

Text: Print Defects: Any Bag that has missing text on any panel will be pulled out and rejected. (The above includes partial text.) Background Color: A copy of the agreed upon final press approval prints and swatches will be kept on site (swatches for light and dark shade of each color will be included).Any deviation outside of this tolerance will be rejected Other print defects: Any noticeable print defect will pulled from the production run and rejected.

Splices: Splices will be pulled from the production run and rejected.


Production Quality • Detailed specifications, COA’s and spot quality checks on incoming raw materials and printed film. • Each pallet of bags is encoded with a date/time of manufacture. • Bag tested from each machine every 15 minutes for • Dimensional analysis and print check. • Seal test: Creep and Total Destruction

• Machine packers also perform a visual print and seal check on bundles of approximately 50 units.


Filling Equipment •

Semi-automated » Minimal alteration required for complete operation on most semi-automated lines. » Most common areas of modification include the addition of - Band Sealer (approx. $15,000) - Distribution head » Typical filling speed is 5-14 bags per minute using 2 -3 people.

Weigh Hopper  Band Sealer

 Pallet Stack

Side & Top View of Distribution Head


• Fully Automated » » » » » »

JEM International are experienced Smartcube filling machine fabricators. Filling speeds in excess of 40 bags per minute are able to be guaranteed. Machine costs typically ~$400,000 including robotic stacking Personnel requirements are typically 1 – 2 people. Machine can include fully automated palletization. Robotic stacking. Peel seal and die cut handle ready.

» Shrink wrap bundling . » Fill weights can range from 1 – 80 lbs.


Density/Volume Sizing Lincube Volume Specification Chart

Base Size

6" x 6"

8" X 8"

7.8" x 9.4"

8" X 10"

9.5" X 9.5"

12" X 13"

S pe c ific G ra vity

0.40

0.50

0.60

0.70

0.80

0.90

1. 0 0

1. 10

1. 2 0

1. 3 0

1. 4 0

P ounds pe r Cubic Foot

25.0

3 1. 2

37.4

43.7

49.9

56.2

62.4

68.6

74.9

8 1. 1

87.4

Fill Height Inches 6.00 9.00 10.00 6.50 10.00 10.25 14.00 5.25 8.00 12.25 7.25 8.00 10.00 11.00 8.50 9.50 12.50 13.25 14.00 10.00 11.00 12.75 15.60 16.00 16.50 18.25

~ G a l's

Cubic Inc he s

P ounds of Ma te ria l pe r S ma rtc ube S ize

0 .9

205

3.0

3.7

4.4

5.2

5.9

6.7

7.4

8.2

8.9

9.6

10.4

1. 3

308

4.4

5.6

6.7

7.8

8.9

10.0

11.1

12.2

13.3

14.4

15.6

1. 5

342

4.9

6.2

7.4

8.6

9.9

11.1

12.4

13.6

14.8

16.1

17.3

1. 7

395

5.7

7.1

8.6

10.0

11.4

12.8

14.3

15.7

17.1

18.6

20.0

2 .6

608

8.8

11.0

13.2

15.4

17.6

19.8

22.0

24.2

26.3

28.5

30.7

2 .7

623

9.0

11.3

13.5

15.8

18.0

20.3

22.5

24.8

27.0

29.3

31.5

3 .7

851

12.3

15.4

18.4

21.5

24.6

27.7

30.7

33.8

36.9

40.0

43.0

1. 5

357

5.2

6.4

7.7

9.0

10.3

11.6

12.9

14.2

15.5

16.8

18.0

2 .4

544

7.9

9.8

11.8

13.7

15.7

17.7

19.6

21.6

23.6

25.5

27.5

3 .6

833

12.0

15.0

18.0

21.0

24.1

27.1

30.1

33.1

36.1

39.1

42.1

2 .6

609

8.8

11.0

13.2

15.4

17.6

19.8

22.0

24.2

26.4

28.6

30.8

2 .9

671

9.7

12.1

14.5

17.0

19.4

21.8

24.2

26.7

29.1

31.5

33.9

3 .6

839

12.1

15.2

18.2

21.2

24.2

27.3

30.3

33.3

36.4

39.4

42.4

4 .0

923

13.3

16.7

20.0

23.3

26.7

30.0

33.3

36.7

40.0

43.3

46.7

3 .2

729

10.5

13.2

15.8

18.4

21.1

23.7

26.3

28.9

31.6

34.2

36.8

3 .5

815

11.8

14.7

17.6

20.6

23.5

26.5

29.4

32.4

35.3

38.2

41.2

4 .6

1,072

15.5

19.4

23.2

27.1

31.0

34.8

38.7

42.6

46.4

50.3

54.2

4 .9

1,136

16.4

20.5

24.6

28.7

32.8

36.9

41.0

45.1

49.2

53.3

57.4

5 .2

1,200

17.3

21.7

26.0

30.3

34.7

39.0

43.3

47.7

52.0

56.3

60.7

6 .3

1,451

21.0

26.2

31.4

36.7

41.9

47.2

52.4

57.6

62.9

68.1

73.3

6 .9

1,596

23.1

28.8

34.6

40.3

46.1

51.9

57.6

63.4

69.2

74.9

80.7

8 .0

1,850

26.7

33.4

40.1

46.8

53.4

60.1

66.8

73.5

80.2

86.8

93.5

9 .8

2,263

32.7

40.9

49.0

57.2

65.4

73.6

81.7

89.9

98.1

106.2

114.4

10 . 0

2,321

33.5

41.9

50.3

58.7

67.1

75.4

83.8

92.2

100.6

109.0

117.4

10 . 4

2,394

34.6

43.2

51.9

60.5

69.2

77.8

86.4

95.1

103.7

112.4

121.0

11. 5

2,648

38.2

47.8

57.4

66.9

76.5

86.1

95.6

105.2

114.7

124.3

133.9


Typical Path Forward • Product Samples for bag sizing. • Palletization/filling trial – Complete engineering audit – Generate “criteria for success” – Determine ROI.

• Initial order for Market trial and verification of ROI assumptions. • Full-scale production/conversion to Smartcube. • Joint quarterly and then annual business review


Smartcube Packaging Systems