By improving the energy efficiency of American homes by 25%, we accomplish the equivalent of taking 1/2 of all passenger cars off the road.

By improving the energy efficiency of American homes by 25%, we accomplish the equivalent of taking 1/2 of

all passenger cars off the road.

Building Performance Upgrades Intelligence

Eric Doub, CEO and [email protected]

303-440-7176, 303-550-6001

EcoSmart Certified Properties

VisionEcoSmart benefits people and the planet through energy and performance upgrades for existing buildings and envisions achieving national scale with significant profitability.

Upgrade large inventories of existing buildings with the EcoSmart Certification System to provide superior economic returns through proprietary, repeatable and licensable packages of Business Systems and Technical Tools, while maintaining industry leadership through continuous innovation.

Mission

Goal by 2018Upgrade 20,000 properties per year and generate revenues of $25M

• North America’s First Zero Energy Home - In 2005 Eric Doub designed, built and tested Solar Harvest, the first zero net energy custom home in a cold climate in North America

• Eric Doub co-wrote the US Green Building Council Guidelines for green remodeling - National Standards for renovation and home performance upgrades analogous to LEED

• Media: Over 50 major features including New York Times, Washington Post, Discovery Channel, HGTV

• Won more than 20 awards including the US Department of Energy’s “Builders Challenge Award” and enjoys international recognition.

Leaders in Technology

Licensing Partners Contractors

• Many thousands of potential Licensing Partners in North America

• Business Model assumes 20,000 upgrades per year performed by Licensing Partners in year 5

• Average revenue of $950 per building from license and project fees

• Whole-Systems One-Stop Solution Model

• EcoSmart Certification: Tailored to clients and markets

• Rapid conversion from assessment to action - 46 separate measures

• Potential scale of dozens of buildings per day per Licensing Partner

• High-volume deal flow from EcoSmart’s market relationships

EcoSmart Certified Properties

Intelligence by:Production by:

Building Performance Upgrades, At Scale Building Performance Upgrades, At Scale

Hydronic Radiant Systems, Garage Ventilation Safety Systems, Lighting – LED and CFL, Air Sealing, Pressure Balancing – whole house, Water – Point of Use Conditioning, Air Conditioners, Water Recirculation Systems, Retro Commissioning, Continuous Commissioning, Air flow Tuning, Water – Whole House Conditioning, Carbon Monoxide Detectors, Heat Pump Heating Systems, Spot Ventilation Systems, Attic Insulation, Combustion Gas Safety Checks, Radon Mitigation, Energy Star Roofing, Solar Electric grid tied, Wall insulation, Energy storage and microgrid, Vehicle to Building VSB, Vehicle to Grid V2G, Crawl Spaces Sealing/Insulation. Daylighting – Solar Tubes Skylights, Integrated Drainage Planes, MVAC Systems, Lighting Controls, Windows, Glazing Solar Control, Chimney Balloons, Water-Efficient Plumbing Fixtures, Attic Hatch Air Sealing, Solar Thermal, Ceiling insulation, Security Systems, Advanced Evaporative Coolers, Air Purification Systems, Bulk Water Management, Fresh Air Systems, Duct Sealing, Hydronic Furnaces, Humidification Systems, Water Heating, Gas Furnaces, Scheduled Maintenance, High Performance Doors

Building Performance Upgrades Implemented by

Licensing Partners

Building Performance Upgrades Intelligence by EcoSmart Certified Properties

One-Stop Solution, Whole System Approach

• Assessment / Audit• Scope - Whole Building Approach

- Human comfort and use• Engineered Specifications• Projected Savings Report• Loan and Tax Rebate Documents

• Pricing• Planning and Best Practices• Supervision• Final Assessment• Monitoring• EcoSmart Certified Properties

Features and Benefits

• Efficient technical interfacing with Contractors

• Constant upgrades to best tested building technology

• Speed of 30, 40, 50 … Buildings/Day

• Training and Support for installation crews

• High Performance Business Systems and Technical Tools

Market Sizeo One Trillion Dollars of lending for energy

efficiency next 10 years in the US. (1)

Market Segmentso Property Management

Companieso REO (Real Estate Owned)o Home Owners Associations o Large Remodeling Contractorso Real Estate Investors

Markets

o 80 million US homes need energy upgrades

o Commercial Retrofits Potential Market next 10 years: $220 billion(2)

(2) Pike Research – Energy Efficiency Retrofits for Commercial and Public Buildings 3Q/2011

(1) Gilbert P. Sperling, U.S. Department of Energy, Colorado Energy Efficiency Finance Summit, August 2010

Markets Market Trends

o Commercial Retrofits currently growing at a rate of 26% percent per year. (Rocky Mountain Institute)

o By 2020, the market for retrofits in commercial buildings will reach $152B worldwide. (Pike Research)

o Growing awareness of energy efficiency benefits by general population, corporations and governments point to a sustainable positive trend in the industry

o In 2012 Florida announced privately backed funds of $550M for commercial energy upgrades, and the city of Sacramento announced $100M of lending in California, leveraging market growth.

Regulations Driving Markets

Seattle WA Ch 20.920. Affects multifamily and commercial buildings and reports are required since April 2010

Washington State Bill 5854. Affects non residential and state buildings and reports are required since January 2011

New York City Local Law 84, Bill 476-A.. Affects commercial buildings and reports are required since May 2011

Washington DC CAEA. Affects non residential buildings and reports are required starting July 2011 thru 2014 progressively

San Francisco CA Ch.20. Affects commercial buildings and reports are required since October 2011 thru 2014 progressively

Oregon House Bill 3535, Affects residential rental and commercial buildings and reports are required since January 2012

The information above is an abstract of State Laws and City Ordinances, and therefore incomplete and not fully descriptive. For complete text of laws and ordinances please refer to each state and city’s websites.

California Assembly Bill 1103. Affects non residential buildings and reports are required since January 2012

Austin TX Ch 6,7. Affects non residential buildings and reports are required starting June 2012 thru 2014 progressively

Philadelphia PA Bill 120428. Affects large commercial buildings and reports will be required starting June 2013

Minneapolis MN Bill is being drafted and would affect state and commercial buildings 2013 thru 2016

Boulder CO City recruits commercial building owners to develop standard procedures for energy performance ratings and regulations for 2014

Legislation requiring benchmarking of energy use and public disclosure thereof

Competitors

No single Company with more than 10% of market share *(*our research based on available data)

Companies in Local Marketso No Company with repeatable and scalable Integrated Solution Model

Competition in the USo Next Step Living - MA (raised $18.2M in December 2012)o Green Homes America – FL, SC, NY, NJ, VA, CA, UTo The Mark Group – PA, NJ, DE o Well Home – CA, CO, MD, MI, NH, MA, PA (Not Integrated Solution)

Mom and Pops Nation Wideo Sell only one product or service, such as a Solar Panel Installer -

Narrow focus with no whole building approach

Even at the pace of each company implementing 20,000 projects per year, treating tens of millions of homes and businesses represents markets with room for many players.

Value proposition for Residential

Certified Property

Comfort Health Performance

Bottom line Benefitso Energy savings, money savingso Safer for residentso Comfortable temperatureso Better air to avoid asthma and allergy

problemso Safeguards from escalating bills and

extreme weathero Spend less on energy, more on food

and health careo EcoSmart Certified Property

Problemo Toxic leaky houseo Lousy airo High energy billso Cold and hot rooms

Solutiono EcoSmart Integrated Solutiono Assessmento Engineered Scopingo Financial Solutions Packageo Upgradeso Fast implementationo Verifying Performanceo Maintaining Performance

FutureFit Your Home™

Value proposition for Commercial

Certified Property

Performance Health

Value

Bottom line Benefitso Healthier employees

• Less absence due to illness• Fewer restricted activity days

o Higher productivityo Corporate Environmental

Stewardship and Competitive Edgeo Lower Costs of Maintenance and

Operationo Longer contracts and higher retention

Problemo High energy costo Cold or hot areaso Low air qualityo Toxic workplaceo Low productivity environment

Solutiono EcoSmart Energy Coachingo Rapid and complete assessmento Optimal Engineered Priced and

Actionable Scopeo Financial Solutions Packageo Faster implementation at least costo Reliable certified performance

Validation from important market player

Prospect: WaypointSegment: REO, Rental to Rehab Portfolio: 1,800 homes growing at the rate of 35 homes/day with $1B secured Jan. 2012 to buy more

• “We need to come up with a set of energy standards, some sort of certification to communicate to renters”

• “..being more comfortable, feeling better with good air quality, and being protected from rising energy costs, renters stay longer in their homes. They are more reliable clients, leading to lower costs for us.”

• “Certified homes will be more attractive to renters and ultimately more attractive to buyers”

Real-time 2012 Example

$ 31,000,000 Contract opportunity for EcoSmart Certified Properties over 5 years

What they say:

Colin Wiel – Co FounderGary Beasley – Managing Director

Value proposition for

Problemo No in-house capability for one-stop Building Performance solutions o Fast-changing technologies and practiceso Need for verified results with tangible measurements and returns

Solutiono EcoSmart Platform provides rapid, consistent quality conversion:

• Rapid and complete assessment• Optimal Engineered, Priced and

Actionable Scope• Faster implementation at least cost• Reliable certified performance• Training and certification of workforce

Bottom line Benefitso Optimal results at controlled budgets and short implementation timeso Tenants who pay lower energy bills don’t fall behind on rento Happier tenants stay longero Houses don’t stay empty as long

Property Management CompaniesAnd Real Estate Owned Portfolio Companies

“Green properties rent and sell faster, and for more.” - Early EcoSmart investor and Boulder landlord

Financial Value Proposition for InvestorsMarketso Addressable markets in the Trillion dollars rangeo Market is durable and trends to expansiono Minimal current competition o Low risk of competition based on piracy or artificially underpriced services

Companyo Eric Doub’s connections and national reputation continue to generate

opportunitieso Well positioned for large contracts in the hundred million dollar range o Because of reputation Company has been attracting top talent in the US

Sustainable Competitive Advantageo ESH has first-mover advantageso ESH has revenue based on a repeatable and scalable model o Software and I.P. protectable

Investment Returns o Potential for rapid growth in market shareo Market share growth generates shareholder valueo 5X to 7X returns expected for investors in year 5

Good for Profit (Bottom Line One)• Financing abundant to support Building Performance Upgrades• Very large market opportunities• Industry leadership • Right product at the right time

Triple Bottom Line for Investors

Good for People (Bottom Line Two)Individuals• Good jobs that will always stay in America• Comfort, health and savings• Greater stability for homeowners in times

of hardshipCommunity and Country• Economic Vitality• Energy Independence and National Security

Good for the Planet (Bottom Line Three)• Drastically reduces gross Carbon Footprint of buildings that account for:o 72% of all electricityo 40% of primary energyo 39% of carbon emissions

• By improving the energy efficiency of American homes by 25%, we accomplish the equivalent of taking 1/2 of all passenger cars off the road.  

Phase I (nearing completion)

o EcoSmart upgrades over 165 test field homeso Develops and proves systems for licensable platformo Positions for multi-million-dollar contracts o Quality of services is illustrated by high rates of

customer satisfaction

Seed Round: Over $1.2M raisedObjectives Achieved: Launch and Develop Business Model; Build Up Revenue Stream Opportunities; Producing & Positioning

o The next capital leverages talent and converts existing and new market opportunities into accelerating revenues

Project Manager-Based Jobs:>$30k

Home Performance Upgrades: <$30k

• Launch Company & Prove Systems

• Earn Revenue in Local Markets

Year 1

2M

3M

Present (This Round Funded)

Operational Break Even

Reve

nues

(Tr

ailin

g 12

mon

ths)

Revenue Projections – 1 Year

1M

Q1 Q2 Q3 Q4

Phase I

Phase II• Continue to ramp up sales• Develop Platform• License to first “test” Partners• Position for Portfolio Markets

Note: No Commercial sector revenues included

165 Homes to date

Phase II Continues

$2M Jobs on cue

100% Annual Growth

Post Money

Local Direct Services:Home Performance Upgrade Jobs <$30K

Local Direct Services:Project Manager-BasedJobs >$30K

Phase II (next)

Second Round Offer: $950,000Objective: Increase revenues from $1M to $5.5M through engaging opportunities built up in Phase I

o 2nd Phase of Platform Developmento Ramp up sales in 3 market segments

• Local Residential Building Performance Upgrades• Local Residential Project Manager-Based• Property Management and Real Estate Companies,

including Property Inspection trade associationso Trials with Licensing Partners

Phase III Positioning for Liquidity Event

o Ramp up with strategic partnerso Revenues of $25M projected in year 5 and $7M in

EBITDAo Phase 4: Sale to strategic or financial buyero Create potential for sale to strategic or financial buyer

in year 4+ o Expected 5X to 7X returns to investors

Third Round Offer: $3MObjective: Increase revenues from $5.5M to $25M

The Financial Projections furnished in this document are based on assumptions only and there can be no assurance given as to the attainment of the Projections to which any such “forward-looking” statements may apply.

Local Direct ServicesProfitable Division for Continuous

Platform Enhancement

Year 1 Year 3Year 2

5M

10M

15M

20M

Licensing Technology Nationwide to

Qualified Partners

25M

Revenue Projections - 5 Years

Phase IIINational Markets

Phase IRegional

Markets

Phase II Regional Markets

Year 4 Year 5

Position for Liquidity Event

Projected 5X-7X Returns to Investors

Position for Liquidity Event

Projected 5X-7X Returns to Investors

Note: No Commercial sector revenues included

Develop

Scale

Local Direct Services:Profitable Division for Continuous

Platform Enhancement

20,000 Buildings/year

Operational Break Even

165 Buildings Upgraded

165 Buildings Upgraded

Launch & Grow

Operational Break Even

Reve

nues

(Tr

ailin

g 12

mon

ths)

Present (This Round Funded)

Post Money

Growing Through Measured Steps

Founders$900K

Round A$1.1M

Residential BPUs

Round B$945K

(Initiating Q1 2013)

Round C$ 3M

LBS

Growth orAcquisition

Capital

ContinuedGrowthand/or

Full or PartialExit Options

Launch Develop Scale

2009-10 2010-12

EcoSmart Homes EcoSmart Certified Properties With Licensing Partners

2013 2014 2015 Forward

Seed Capital Round A Round B Round C Additional Rounds

PMB Project Manager-Based Remodels

Round A accomplished incrementally

Substantial growth above expectations

in Q1 2013

Residential Building Performance Upgrades

Sizes of boxes do not represent revenues. For revenues please refer to the graphs on the page above.

Licensing-Based Services “Test Market”

LBS

Licensing-Based Services National

Market

LBS

- - Launch Company & Prove Systems

- Earn Revenue in Local Markets

- Continue to ramp up sales- Develop Platform

- License to first “test” Partners- Position for Portfolio Markets

- Grow Sales in National Markets - Continue R&D in Local Markets

Phase I Phase II Phase III

1025 Rosewood AvenueBoulder, CO 80304

www.EcoSmartHomes.comEric Doub, CEO303-440-7176

[email protected]