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SCI Engineered Materials, Inc.

March 2016

The Science of Engineered Materials®

www.sciengineeredmaterials.com

This presentation and subsequent discussion contains certain forward-looking statements within the

meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities

Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created

thereby. Those statements include, but are not limited to, all statements regarding intent, beliefs,

expectations, projections, forecasts, and plans of the Company and its management, and other risks and

uncertainties detailed from time to time in the Company's Securities and Exchange Commission filings,

including the Company's Annual Report on Form 10-K for the year ended December 31, 2015. One or

more of these factors have affected, and could in the future affect, the Company's projections. Therefore,

there can be no assurances that the forward-looking statements included in this presentation will prove to

be accurate. In light of the significant uncertainties in the forward-looking statements included herein, the

inclusion of such information should not be regarded as a representation by the Company, or any other

persons, that the objectives and plans of the company will be achieved. All forward-looking statements

made in this presentation are based on information presently available to the management of the

Company. The Company assumes no obligation to update any forward-looking statements.

Safe Harbor

2 The Science of Engineered Materials

®

Overview

Founded in 1987 as Superconductive Components, Inc. Changed name

to SCI Engineered Materials, Inc. in 2007

Initially focused on R&D with high temperature superconducting materials

and devices

Developed manufacturing capabilities to produce advanced compositions

for sputtering targets

Manufacture products for diverse global markets

Continue to leverage manufacturing capabilities, intellectual property and

proprietary knowledge into complementary growth markets


®

4

SCI Timeline

1987 1989 Initial Public

Offering

2001 Patent, large

strongly linked

Monoliths

2002 2003 Began rebranding

company as

SCI Engineered

Materials

2004 Moved to current

location

2006 2007

TCO: Transparent Conductive Oxide HDD: Hard Disk Drive

NASA: National Association Space Agency TFT: Thin Film Transistor

NSF: National Science Foundation TFB: Thin Film Battery

SBIR: Small Business Innovative Research Grant

Superconductive

Components, Inc.

(SCI) founded

1999 NSFSBIR

NASA SBIR

NSF STTR

NSFBIR

Formed Target

Materials Corp.

Patent: fine

particle

Bi-Sr-Ca-Cu-O

Successor

management

Third Frontier Grant

to commercialize

Thin Film Battery materials

2005 Became

ISO 9001:2000

certified

Commercialized

& scaled-up

products for

automotive

2008 Received Third

Frontier grant to

commercialize AZO

& rotatable capacity

Corporate name

Changed to

SCI Engineered

Materials, Inc.

Expanded

international

marketing

2011 Expanded AZO

manufacturing

capacity for

rotatable

cylinders

2014 Received multi-

product orders

for AZO – from

China

1991

2015 - 2016 Commercialization

of target markets

2015 TCO & TFT

development

for Displays;

developed

MgO for HDD

Launched MgO

2016 2017 Launched TFT for Displays;

commercialization of TFB


5

Photonics

Transparent Electronics

Thin Film Solar

Thin Film Battery Glass

• Pursue significant growth opportunities in Asia

• Develop innovative products and custom

solutions

Growth Strategy

• Leverage established capabilities

• Exploit niche market opportunities


6

SCI Conductive Oxide Road Map

Thin

Film

Solar

Low E Glass

~150 mil m2

Display

~ 5 Billion

TCO application markets

Started AZO production

Began penetrating Thin

Film Solar industry

Commercialization in

Low E Glass industry

AZO for liquid crystal cell

Testing at LCI Kent State

AZO tested at one of the largest

display manufacturers

Prototype in industry and

commercialization in display market

TCO

Started ZTO

R&D (2013)

TFT major technologies

a-Si:

Widely used, cheap, hard to size down

LTPS:

Commonly used in high end

applications, expensive

TFT

IGZO (metal oxide)

smaller, less energy

consumption, 7km2 for

phone display by 2024


7

Products/Markets/End Users

Products Markets End Users

HDD

Solar

Display

Battery

Semiconductor

Photonics

Automobile

Wearable

Reflective

materials

AZO

ZTO

LiCoO2

MgO

Display

Energy

Glass


8

A multi-billion global industry with attractive growth niches

SCI has been involved in manufacturing products used in

photonic and optic applications for more than 15 years

Significant customers in diverse segments with leading

market share and expanding product lines

SCI produces a significant share of targets for two major

customers who have a dominant market share of an

automotive application

Price volatility of commodity material contributes to revenue

fluctuation

Photonics


Amorphous Silicon Cadmium Telluride Copper Indium Gallium Selenide (CIGS)

CIGS has highest efficiency potential of thin film technologies

developed to date

SCI is supplying TCOs and some metals to CIGS manufacturers

Utilize core capabilities to manufacture TCOs

Develop proprietary TCO materials to meet specific customer needs

Expanding global sales and marketing

SCI is well-positioned to benefit from future industry growth

Market has attractive long-term growth potential

Thin Film Solar Technologies 3 GW 1 GW


®

Source: European Photovoltaic Industry Association 2012 & 2013

Solar Installations Globally by Region

10

Europe 74%

APAC 9%

Americas 8%

China 7%

ROW <2%

MEA 1%

Actual 2011 29.6 GW

Europe 25%

APAC 17%

Americas 19%

China 29%

MEA 10%

Forecast 2018 68.6 GW

Recent Forecast (1)

2015 59 GW

2016 67 GW

2017 72 GW

(1) IHS: January 2016 The Science of Engineered Materials

®

11

Growth Opportunities in China

• Global leader in Photovoltaic (PV) Manufacturing

• Largest market for PV modules

• Electric demand growing at a rapid rate

• Growing health concerns of burning fossil fuels

• Plans to increase installed solar capacity from 28 GW to

150 GW-200 GW by 2020

• December 2015 COP21 international agreement in Paris


12

Examples of Thin Film Solar Manufacturers


13

E-glass

AZO is used in E-glass applications as a passive layer over silver

Layers of silver and AZO are combined to control heat gain or loss in

homes and offices

Newest E-glass uses 3 layers of AZO and 3 layers of silver

Sputtering Targets for E-glass applications usually range from 2.8 – 3.8

meters in length


14

End Markets

Products

TCO

(AZO and other metal doped ZnO)

TFT

(ZTO)

Liquid Crystal Display

Active Matrix

USER Special Display

Technologies Co.

TCO

TFT


Display

Smart Phone

Tablet

15

Financial Trends


16

Total Revenue & Key Commodity Cost

Total Revenue ($) Key Commodity Cost

7,000,000

7,500,000

8,000,000

8,500,000

9,000,000

9,500,000

2010 2011 2012 2013 2014 2015

Indexed

0

0.25

0.5

0.75

1

2011 2012 2013 2014 2015


17

Note: Twelve Months Ended December 31

Gross Profit ($M) Gross Profit Margin (%)

Gross Profit: Dollars and Margin

2014

17.9 18.9 19.3

20.0

26.1

2011 2012 2013 2015 2011 2012 2013 2014 2015


18 Note: At December 31

Cash

$798,069

$630,819 $622,727

$1,011,956 $997,170


Dollars

19

Investment Opportunity

• Established capabilities that are being leveraged in

complementary businesses

• Significant growth opportunities in thin film solar and display

markets

• Solid balance sheet and financial discipline

• Low market valuation


20


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