Partnership Opportunities Discussions with VIMS October 17, 2008

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1 inspired by ideas driven by markets Partnership Opportunities Discussions with VIMS October 17, 2008 Joseph Heyman, PhD Luna Chief Scientific Officer

2 Looking Forward Statement Statements in this presentation include information that constitutes 'forward-looking statements' made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements about Luna s plans, objectives and strategies, and management s expectations and beliefs about business results in the future. We cannot assure you that our expectations will be achieved, or that any deviations will not be material. Forward-looking statements are subject to many assumptions, risks, and uncertainties that may cause future results to differ materially from those anticipated, including the risks and other factors listed in Luna s filings with the Securities and Exchange Commission. All forward-looking statements are based on information available to Luna as of today s date. Luna undertakes no obligations to update any forward-looking statements as a result of any new information, future events, changed expectations or otherwise.

3 Possible Technology Interactions Luna is interested in teaming where such interactions are mutually beneficial Advancing the state of the art and science Potential for product(s) Luna has strong interest in environment, energy, medical, water, infrastructure and security Luna s technologies include fiber optics, nanomaterials, acoustics, coatings and secure computing

4 Potential Areas of Partnership Hampton Group Physical Acoustics Sediment Dr. Paul Panetta Groundwater Storm surge or infrasonic gravity wave sensor Fiber Optics Sensors Shape sensing fiber: reports back in near real-time the 4-D geometry of meters of fiber Highly distributed fiber sensing for strain and temperature Centimeter resolution up to 70 meters +/- 0.1 C, +/- 1µ strain resolution at 1 cm High speed 5 second acquisition times at high resolution High temperature capabilties up to 300 C Other Sensors to solutions@lunainnovations.com or call Luna s Products Team at

5 Groundwater 47% of US population Groundwater Component Water Cycle

6 Groundwater & Stream Flow Measurement Significance Groundwater can transport hazardous materials organic and inorganic compounds, chemicals, mineral salts, nutrients, radionuclides, metals Accurate measurement of hydraulic parameters are essential for adjusting transport models Groundwater and stream vector flow velocity are important for: choosing appropriate remedial actions determining risks at clean up sites and quantifying impacts to the surface/subsurface environment predicting the contaminant fate and transport

7 Potential Applications Transport Mechanisms of Contaminants Monitoring Contamination Sites Well Management Pumping Aquifers Oil Production Earthen Stability Quicksand Transformation

8 Comparison of Luna s Acoustic Technology over Existing Flow Sensors Type Advantages Disadvantages of Different Types 1 Injection Techniques. Widely used Invasive, expensive Not real-time 2 Colloidal methods Fast data acquisition Measure horizontal flows only Short duration tests only 3 Thermal sensors Good resolution Avoids borehole effects 4 Doppler Inexpensive and noninvasive Vector flow Inaccurate at low velocities works on saturated, unconsolidated sands only Unreliable and invasive Resolution limits use to a narrow range of flow velocities Requires wells for installation 5 Luna s (gwash). Very high resolution works on a wide range of soils Vector flow Potentially inexpensive, realtime, non-invasive. Requires wells for installation

9 Acoustic Phase Locking- Concept 2 Transducers A B Phase Lock Loop System Controller Two transducers - two configurations alternating propagation direction (A to B) establishes vector groundwater flow. Frequency (Hz) Phase Lock Loop Frequency (Raw Data) Downstream df 1 df 2 df 3 df 4 df 5 Upstream Time Changing slope due to temperature Flow component no flow flow velocity of cm/sec Pulse phase lock loop (PPLL) forces transmitter-receiver system to operate at an acoustic frequency determined by environment Frequency shift proportional to groundwater flow velocity

10 Static Media Tests Pulsed Phase lock loop Pulsed Phase Locked Loop Frequency Applied Load 24 lbs 12 lbs frequency Time Acoustic Signals Transducers under sand Static tests prove system phase-locks through sand Open-loop Phase-Locked Through 1 Sand

11 Design/Build Hydraulic Test Cell Electronics Head Pressure Hydraulic test cell designed according to ASTM standard. Features include: Adjustable flow rates Variable propagation distances Flow visualization Variable acoustic frequencies Transducers Sand Column

12 Luna Hydraulic Test: Data Collection Test cell flow rate adjusted through head pressure Dye tests allowed flow visualization LabView software data acquisition

13 Experimentation Typical data acquisition and analysis reducing measurements to flow parameters. h1" h2" h (cm) temp. T Deg F start (ml) End (ml) Vol (ml) t sec q (ml/sec) q/a in cm/sec No Flow (inlet valve shut) A*(h/L) Hydraulic conductivity K flow flow flow flow flow flow

14 Data Analysis and Validation Volume flow rate Vs Head Pressure D a r c y s Q in cc Darcy's Law Volume flow is linear with head pressure indicating uniform and laminar flow in the porous media L a w Luna s PPLL Frequency data for above flow rates A * (h/l) in cmsqr Phase lock loop difference frequency for changing flow velocities 14 gwash frequency increases linearly with increasing flow Difference Frequency (Hz) Flow Velocity (cm/sec)

15 Static Dynamic state of the porous media Static state of the porous media freq quency (df) Dynamic state of the porous media Hydraulic Gradient Vs. All acoustic flows phase lock loop frequency hydraulic gradient Head pressure increase caused sand particle motion and deviation from Darcy s law. Potential Applications Monitor earthen stability Dam/ levee warning system monitor Sea-floor methane hydrate mound monitor Quicksand monitor

16 Modeling & Experimentation 1400 Salt transport through sand Solute (Chloride) Transport Breakthrough Curves Concentration in ppm Time in sec Simultaneous measurement of acoustic flow and tracer concentration Luna Test Cell Data Numerical Model Duke model (red) compared with acoustic breakthrough curve (blue)

17 Applications for High-resolution UT Dynamic Temperature Sensor Infrasonic Pressure Ocean Waves

18 Single-channel ultrasonic thermometer Co-60 Co-60 Shutter Laboratory prototype design: 1 Frequency Counter (1) Water tank (2) Foam enclosure (3) Ultrasonic transducer 3 PPLL 2 Ultrasonic wave velocity in medium depends on temperature: V=V(T) Pulsed Phase Lock Loop (PPLL) tracks signal phase by shifting its output frequency f: δf f = δv V = V ( T ) V T Change of the PPLL frequency is related to the change in temperature.

19 Temperature sensitivity test 1ft 3 thermally insulated water tank Close to thermal equilibrium (heating/cooling rate is 4 (µk/s) Temperature measured every 4s over 400 s period. Noise estimate from the linear fit: T RMS =3.2 (µk) Measurement noise: 3.2 (µk)

20 Ocean Infrasound Sensor Potential Applications Predictive storm surge from vector/amplitude data Wave energy sensor from transfer models Homeland security Ship movements Swimmers UUV sensor Weapons test Tunneling Marine life dynamics Tidal nonlinear dynamics Other

21 Luna Infrasonic Ocean Sensor Concept Device uses ocean water as actual sensor Sensor size can be on the order of cm Sensor sensitivity projected to be ~10-7 b On the order of a micrometer, delta Z Group of sensors can determine wave vector to project source Can be low cost in volume Topic is open for discussions

22 Summary Luna s Acoustic technology has direct potential value to VIMS programs Some of the technology is at high TRL and can be directly coupled to existing work Some of the technology may suggest new directions of interest and value to both organizations Funding for good, new ideas may even exist in 2009/10 in spite of the economy (forever the optimist!)

23 Discussion