Analyst: Victor Sula, Ph.D.

Report Update
February 17th, 2009

2/13/09
OOIL daily
0.45

0.40

0.35

0.30

OriginOil, Inc.
0.25
5645 W Adams Blvd
Los Angeles, CA 90016 volume © BigCharts.com
400

Thousands
300
Phone: (323) 939-6645
200
Fax: (323) 939-6005 100
E-mail: ir@originoil.com 0
Website: www.originoil.com Dec 09 Feb

MARKET DATA Company Introduction

OriginOil Inc. (OOIL) is developing a portfolio of new technologies
for producing oil from algae, a next-generation biofuel feedstock
Symbol OOIL that may yield 30 times more energy per acre than crops such as
Exchanges OTCBB
soybeans. The biofuel produced by the OriginOil System can re-
Current Price $0.369
Rating Speculative Buy place petroleum in various applications such as diesel, gasoline, jet
Outstanding Shares 143.4 Million fuel, plastics and solvents. In addition. the biomass remaining after
Market Cap. $51.63 Million extraction of the oil can be made into natural gas or liquid fuel, as
Average 3M Volume 41,766.7 well as animal feed and fertilizer. By creating a fuel that replaces
fossil fuel, OOIL also helps producers garner saleable carbon cred-
its. The OriginOil System can be operated as a stand-alone produc-
Source: Yahoo Finance, Analyst Estimates tion system or connected in a parallel network. OOIL’s proprietary
process is supported by intellectual property assets that include
six patent filings and one international Patent Cooperation Treaty
(PCT).

Efficiently producing oil from algae in a closed system requires cul-

tivating an algal strain with high lipid content and a rapid growth
rate, which in turn requires the right combination of water, sun-
light, nutrients and carbon dioxide. In addition, algae organisms
are protected by a tough cell wall, which must be cracked to extract
the oil. This is normally an energy-intensive process. OOIL has suc-
cessfully developed a cost-effective cultivation and extraction sys-
tem that is also safe and energy-efficient. The cultivation system,
known as the Helix BioReactor™, is designed to increase and op-
timize photosynthetic growth of algae. This system has been de-
ployed in OOIL’s laboratory prototypes and will be scaled to larger-
volume prototypes in 2009,, with field trials expected thereafter. In
December 2008, OOIL announced the successful automation of its
Helix BioReactor™ system, which makes large-scale commercial al-

OriginOil, Inc. (OTCBB: OOIL) 1

 Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009

gae production scalable. To help dissolve nutrients in the growth phase and solve the tough cell wall problem
in the extraction phase, the Company has developed the Quantum Fracturing™ process, which uses ultrasound
from intense fluid fracturing to break down algae cells, much in the same way a high-frequency sound wave
breaks glass. Combined with the use of tuned low-power microwave radiation, this process maximizes oil yield
while minimizing energy use.

Since the Company’s shares began trading on the OTCBB market in late April of last year, OOIL has garnered
considerable media attention. The Company was discussed in Forbes.com, and both the Los Angeles Business
Journal and Biodiesel magazine printed stories about OOIL in their August 2008 issues. In addition, the Com-
pany was recently selected as one of the “50 Hottest Companies in Bioenergy” by Biofuels Digest, and named as
one of the “Top 100 Clean Energy Technologies” by the New Energy Congress.

Cooperative Agreement with Idaho National Laboratory

In February 2009, OOIL announced a cooperative agreement with the U.S. Department of Energy’s Idaho Na-
tional Laboratory (INL). The parties agreed upon a multi-phase research program that will focus on validating
and commercially scaling OOIL’s technology for producing algae-based fuels, utilizing INL’s state-of-the-art
equipment, capabilities, scientists and engineers.

The initial phase of the research program, which began in February, focuses on the collaborative development
of an energy balance model for photobioreactor-based algae systems. OOIL anticipates using this model to op-
timize its algae-to-oil technology as early as the first quarter of 2009. Subsequent phases will seek to validate
OOIL’s processes and pilot specific commercial applications.

The Idaho National Laboratory is a science-based, applied engineering national laboratory that supports the
Department of Energy (DOE) on energy research and national defense. Its mission is to ensure U.S. energy se-
curity. Part of INL’s mandate is to facilitate the development of advanced renewable energy technologies into
cost-effective, scalable industrial processes. OOIL’s partnership with INL may help advance America’s progress
toward energy independence.

Technology Development Update

The Company is developing a technology for producing biofuel

from algae using a cost-effective, high-speed process. Biofuel
may replace petroleum in diesel, gasoline, jet fuel, plastics and
solvents applications.

OOIL’s research addresses the three primary challenges of cul-

tivating algae for oil:

1. Algae growth is dependent on a calm fluid environment;

algae don’t like agitation. One of the primary challenges fac-
ing growers is how to optimally introduce carbon dioxide
(CO2) and nutrients into the system without disrupting or
over-aerating the growing algae culture.

OriginOil, Inc. (OTCBB: OOIL) 2

 Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009

2. Algae require light as a source of energy to fuel its growth. Algae cultivation systems must also distribute light
cost-effectively and evenly within the algae culture.

3. Algae organisms are protected by a tough cell wall. That wall must be cracked — normally an energy-inten-
sive process — to extract the oil. The challenge is to maximize oil yield by cracking as many of the algae cells
as possible with the minimal amount of energy.

The Company is developing a portfolio of proprietary technologies to address these challenges, including Quan-
tum Fracturing™ and the Helix BioReactor™. OOIL has six patent applications pending. Its patent-pending pro-
cesses are described below:

• Quantum Fracturing™ is a process that works at the microscopic level to unlock biological and chemical prop-
erties, and facilitate total, instantaneous distribution of CO2 and nutrients to the algae culture with minimal
disruption.

• Helix BioReactor™ is an advanced algae growth system for growing multiple layers of algae biomass around-
the-clock by optimizing light delivery.

• Modular and Scalable Growth System is a system for enhancing and optimizing algae growth through hori-
zontal and vertical “stacking” of multiple Helix BioReactors into an integrated network of fully automated,
portable and remotely monitored growth units.

• Lysing and Extraction System for Microorganisms is an energy-efficient method for extracting oil from algae
using tuned microwaves and Quantum Fracturing without the need for chemical solvents.

• Algae Catalyzer is a process relating to the on-site conversion and sequestration of algae biomass for electric-
ity. CO2 recovery minimizes carbon requirements while cogeneration maximizes available energy.

• Optimizing Photosynthetic Growth is a process which incorporates further refinements to the Helix Bioreac-
tor™ advanced algae growth system.

Helix BioReactor automation

The heart of the Company’s system is the Helix BioReactor, an

advanced algae growth system for growing multiple layers of
algae biomass around-the-clock. In a natural pond, the sun il-
luminates only one layer of algae growth, penetrating down
to about half an inch below the surface. In contrast, the Helix
BioReactor features a rotating vertical shaft with very low en-
ergy lights arranged in a helix or spiral pattern, which supplies
light for a theoretically unlimited number of layers. Addition-
ally, each lighting element is engineered to produce specific light
waves and frequencies for optimal algae growth.

The helix structure also provides the BioReactor’s nutrient de-

livery system, through which the Quantum Fractured nutrients
and CO2 are evenly delivered across the entire algae culture.

OriginOil, Inc. (OTCBB: OOIL) 3

 Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009

Nutrients can be monitored and adjusted for optimum growth.

In September 2008, the Company reported improvements to the Helix BioReactor subsystems that enhance its
performance characteristics. The Company is now in the process of designing and laying out larger-scale sys-
tems.

In December 2008, OOIL announced the successful automation of its Helix BioReactor system for optimizing
algae growth and making commercial algae production scalable. The Helix BioReactor’s unique design allows
algae culture to replicate exponentially within a smaller installation footprint. Automation of this system is a
key step toward continuous algae production, allowing greater control of the growth environment and efficient,
low-cost industrial algae production.

Increased Recognition of the Company’s Technology

The Company has been widely recognized for its promising clean energy technology.

In December 2008, OOIL was selected as one of the “50 Hottest Companies in Bioenergy” by Biofuels Digest, the
most widely-read biofuels newsletter. Winners of this Biofuels Digest award will be honored at a presentation in
Washington, D.C. on April 20, 2009, in conjunction with the Advanced Biofuels Development Summit. Rankings
were determined by the Biofuels Digest award panel and recognize the important technology advances made
by OOIL in 2008.

In November 2008, the New Energy Congress recognized OOIL as having one of the top 100 clean energy tech-
nologies. NEC ranked OOIL as the top algae company. The New Energy Congress is an association of energy
professionals who review existing and up-and-coming energy technologies to identify technologies that are
clean, renewable, affordable, reliable, easy to implement and safe.

OOIL to present at World Biofuels Markets conference to be held March 16-18, 2009, in Brussels, Belgium

The Company’s CEO, Riggs Eckelberry, will be presenting at the upcoming Algae Fuels Forum, a full-day semi-
nar that will examine the viability of algae as a sustainable, low-cost feedstock for the biofuels industry. Other
panelists scheduled to appear with Mr. Eckelberry include representatives from BP Biofuels, Verenium Corpora-
tion, Boeing Commercial Airplanes and eBIO (the European Bioethanol Fuel Association). The World Biofuels
Markets event attracts more than 1,500 attendees and more than 1,000 exhibitors from around the world.

OriginOil, Inc. (OTCBB: OOIL) 4

 Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009

America’s Alternative Energy Initiatives

President Obama is promoting alternative energy as a ve-
hicle for creating jobs and reducing U.S. dependence on
imported fossil fuels. America’s addiction to foreign oil
significantly undermines national security and damages
the environment. President Obama’s plan calls for signifi-
cant new investments in alternative and renewable energy
technologies, with the goal of ending America’s addiction to
foreign oil, addressing the global climate crisis and creating
millions of new jobs. Particularly, the Obama-Biden com-
prehensive New Energy for America plan aims to:
• Create 5 million new jobs by investing $150 billion over
the next 10 years to support private sector efforts to
build a clean energy future;
• Ensure that 10% of U.S electricity will come from renew-
able sources by 2012, and 25% by 2025;
• Implement an economy-wide program to reduce green-
house gas emissions 80% by 2050;
• Save more oil within 10 years than the U.S. is currently importing from the Middle East and Venezuela com-
bined; and
• Put 1 million Plug-In Hybrid cars manufactured in America on the road by 2015.

The alternative energy sector received a strong infusion of new capital last year with record investments in new
projects. Venture capital investment in the industry reached a record $4.7 billion in 2008. However, falling oil pric-
es and frozen credit markets took their toll in the fourth quarter of 2008, and venture capital investments dropped
44% during the quarter to $954 million.

We expect the government financial stimulus package to fuel renewed growth in the clean energy sector going
forward, including development-stage technology companies such as OOIL. President Obama’s plan includes
spending of $14.4 billion for government energy efficiency and renewable-energy programs, $4.5 billion for a
smart electricity grid, $2.9 billion to weatherize low-income homes and a tax-credit extension for renewable en-
ergy production.

Financial Analysis

Income statement

The Company is still in the development stage and generated no revenues during the three months and nine
months ended September 30, 2008. OOIL expects to generate revenues in the future from licensing fees and sup-
porting its technology for fuel refiners and chemical and oil company customers.

OriginOil, Inc. (OTCBB: OOIL) 5

 Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009

Income Statement, $
9 months 9 months
Q3 2007 Q3 2008 % chg
2007 2008

Revenue - - - 0 0 -

Selling and marketing 14,594 144,829 892% 19,694 201,560 923%

General and administrative expenses 142,108 246,145 73% 190,189 585,551 208%
Research & development - 78,310 n/m - 190,094
Depreciation & amortization expense - 494 n/m - 1,062 n/m
Total operating expenses 156,702 469,778 200% 209,883 978,267 366%

Operating income -156,702 -469,778 n/m -209,883 -978,267 n/m

Total other income/(expense) 1,902 5,985 215% 1,905 23,225 1119%
Net loss -154,800 -463,793 n/m -207,978 -955,042 n/m

Source: SEC Filings

The Company’s operating expenses consisted mainly of salaries and professional fees, technology testing and
research, and the costs associated with registering for a public share offering in the first nine months of 2008, for
an aggregate $978,267.

Research and development expenses were $190,094 for the nine months ended September 30, 2008, and con-
sisted primarily of testing, research and product development.

Liquidity and capital resources

As of September 30, 2008, OOIL had $971,707 in working capital, down from $1.2 million at December 31, 2007.
This decline is attributable to ongoing costs for developing the technology. Operating funds have been obtained
through share sales.

Balance sheet $

31-Dec-07 30-Jun-08 30-Sep-08

Cash and cash equivalents 1,267,670 1,267,670 1,267,670

Total Current Assets 1,267,670 1,267,670 1,267,670
Total Other Assets 8,678 8,678 8,678
Total assets 1,276,348 1,276,348 1,276,348

Total liabilities 30,041 30,041 30,041

Total shareholders’ equity 1,246,307 1,246,307 1,246,307
Accumulated deficit -446,091 -446,091 -446,091

Source: SEC Filings

OOIL will likely require significant additional financing to bring its technology to market. However, there is no
assurance that additional financing will be available to the Company on favorable terms, if at all. The Company
plans to raise additional capital through equity sales.

OriginOil, Inc. (OTCBB: OOIL) 6

 Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009

Analyst Summary
Since our initial report in September of 2008 when it was at $0.42, OOIL’s share price has declined as low as $0.25
following the steep decline in oil prices, but recovered in December 2008-January 2009 to the current range of
$0.34-$0.44 on expectations that the Obama administration will give strategic support to alternative fuels.

OOIL is in the early stages of developing a technology for producing biofuels from algae. Although the Company
is likely years from commercializing its systems, its technology holds significant promise and the potential payoff
may be enormous.

Algae has emerged as a viable feedstock in the renewable energy sector, and the Company is developing tech-
nologies for the commercial production of algae oil. The Obama administration has already proposed a $150
billion plan to further advance U.S. renewable and alternative energy initiatives over the next 10 years. This com-
mitment, coupled with growing consumer demand for non-petroleum energy sources, creates opportunities for
OOIL and others to develop and commercialize new energy technologies.

The Company has an end-to-end algae growth and oil extraction system for continuous oil production that ad-
dresses the challenges that up to now have limited the prospects for algae-based biofuel.

In the next 12 months, OOIL plans to develop prototypes and commence scale up. The Company plans to build
and operate a small-scale installation which it will use to demonstrate its technology for potential licensees and
business partners. OOIL anticipates developing a mid-sized prototype in February 2009, and to continuing to
quantify its technology in 2009.

OOIL will likely focus on a small number of potential ‘plug-in’ applications where algae production can be im-
plemented relatively easily and pursue licensing opportunities. The Company plans to begin developing these
applications with partners in 2009. For example, OOIL is already exploring opportunities for algae production
in industrial gas-fired kilns, where algae can be used to absorb CO2 emissions and the resulting biomass can be
gasified for use directly in the furnace.

Regional partners will be recruited for local fabrication, sales, installation and support of the systems. OOIL has
a goal of recruiting a first geographic partner by year-end 2009.

OOIL also plans to license its technology to fuel refiners, chemical and oil companies and other customers, thus
generating licensing and servicing revenue. This business model ensures that OOIL’s technology can be deployed
worldwide in a quick and efficient manner.

Robust clean energy demand, OOIL’s progress in advancing its biofuel technology, and the significant revenue
stream likely to result from royalties and licensing fees, are reasons we continue to rate OOIL a Speculative Buy.
In addition, the recently signed partnership agreement with Idaho National Laboratory (INL) could accelerate de-
velopment of the Company’s technology and facilitate its rapid deployment in lucrative commercial applications.

OriginOil, Inc. (OTCBB: OOIL) 7


Management Update
Vikram M. Pattarkine
Chief Technology Officer
Heather Heath
Biochemist
OriginOil, Inc. (OTCBB: OOIL)
Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009
In October 2008, OOIL recruited Vikram M. Pattarkine, Ph.D. to be its chief technology officer. Dr. Pattar-
kine’s career spans more than 25 years as a chemical-environmental engineer, with expertise in processes
related to waste treatment, nutrient management, water quality and renewable energy. Dr. Pattarkine has
extensive international experience covering research, consulting and training. The Company will benefit
from Dr. Pattarkine’s technical expertise in environmental engineering as well as his business acumen and
research experience.
Heather Heath joined the Company as a biochemist who will be developing and managing growth pro-
tocols. She brings an extensive laboratory and molecular biology background that includes measuring
enzymatic activities (Enzyme Assays), measuring the concentration of substances in biological liquids (Im-
munoassays), DNA amplification via polymerase chain reaction (PCR) or recombinant DNA techniques,
Gravimetric Analysis and Potentiometric and pH Titration measurement. Prior to joining OOIL, she served
as a biochemist and research associate at Siemens Healthcare Diagnostics, one of the world’s largest clinical
diagnostics companies, where she was involved with experimental preparation, experimental investiga-
tion and data preparation. She received a Bachelor of Science degree from California State University at
Northridge and graduated cum laude with an Associate of Science degree in veterinary technology from
Harcum College.
8
 Analyst: Victor Sula, Ph.D.
Report Update
February 17th, 2009

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We are committed to providing factual information on the companies that are profiled. However, we do not provide any assurance as to the accuracy or com-
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To the fullest extent of the law, we will not be liable to any person or entity for the quality, accuracy, completeness, reliability, or timeliness of the information
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All decisions are made solely by the analyst and independent of outside parties or influence.

I, Victor Sula, Ph.D, the author of this report, certify that the material and views presented herein represent my personal opinion regarding the content and securities included in this
report. In no way has my opinion been influenced by outside parties, nor has my compensation been either directly or indirectly tied to the performance of any security listed. I certify
that I do not currently own, nor will own and shares or securities in any of the companies featured in this report.

Victor Sula, Ph.D. - Senior Analyst

Victor Sula, Ph.D. has held the position of Senior Analyst with several independent investment research firms since 2004. Prior to 2004, Mr. Sula held Senior Financial Consultant posi-
tions within the World Bank sponsored Agency for Restructuring and Enterprise Assistance and TACIS sponsored Center for Productivity and Competitiveness of Moldova, where
he was involved in corporate reorganization and liquidation. He is also employed as Associate Professor at the Academy of Economic Studies of Moldova. Mr. Sula earned his Ph.D.
degree in 2001 and bachelor’s degree in Finance in 1997 from the Academy of Economic Studies of Moldova. Mr. Sula is currently a level III candidate in the CFA program.

OriginOil, Inc. (OTCBB: OOIL) 9