SPV SPV Solar One Company Overview 2015 11 01 G

Scientific Production Ventures LLC 2530 Meridian Parkway, Durham, NC 27713 www.scientificproductionventures.com

AT A GLANCE

Founded 2000

Headquarters Durham, North Carolina USA

Past Project Profile

Current Project Profile

Fiber Optics

Nano Materials

Green Building Materials

Solar Chips

Green Cleaning Products

Utility Scale Solar

UV Water Purification

LED Manufacturing

Medical Uberization

Piezoelectric Wireless Charging

Hydroponics

Green Sealants

Founder Dr. Isaac B. Horton III

INTRODUCTION

Scientific Production Ventures LLC (SPV) partnered with a multi-billion-dollar private equity fund for three years. SPV created a high yield solar model. While SPV has invested in several other technologies/companies, it created SPV Solar One LLC, to focus on funding, developing, constructing, and managing small utility-scale solar photovoltaic (PV) projects located on brownfields. SPV employs its unique intellectual assets to generate superior investment returns compared to traditional utility-scale solar PV projects.

SPV’s solar projects provide clean energy at a competitive price point to address increasing U.S. electricity demand. SPV safely repurposes brownfield sites to provide value to communities, and deliver an attractive investment rate of return (IRR) in the mid-twenties to investors.

COMPANY BACKGROUND

In the mid 1990’s, Dr. Isaac B. Horton, III, left corporate America and founded his first company based on light (or photons). The fiber-optic lighting company installed more than $20 million in Light Pumps and won national awards before it was sold. At that time, Dr. Horton began to invest in Nano and solar-related companies as well as starting a water technology company. Dr. Horton and his companies were issued over 140 patents. As a

result, several boutique investment firms sought the expertise of Dr. Horton to help with due diligence of

technology companies, which led to the formation of Scientific Production Ventures LLC in 2000.

SPV formally started business operations in the solar market through a partnership with Cherokee Investment Partners LLC, the leading private equity firm investing capital and expertise in brownfield redevelopment.

Highlights from the partnership include:

Developed key financial criteria for successful solar projects and reviewed the 25,000 sites in the EPA’s database; sent more than a 10,000 correspondents to potential owners of sites that met the criteria.

Signed LOIs totaling $7 billion in solar projects with returns north of 15% IRR

Began to investigate a renewable fund structure to harvest its $7 billion pipeline

Closed on $195 million of projects funded by Cherokee

Identified a structure to increase returns of solar project from 10% IRR to greater than 25% IRR, named “Solar in a Box”.

COMPANY ADVANTAGES

During the partnership with Cherokee Partners, Scientific Production Ventures, LLC developed unique brownfield and financial expertise. Combined with a factory-like solar development process, SPV generates superior investment returns compared to traditional utility-scale solar PV projects. These assets are utilized to generate a number of key company advantages including:

SCIENTIFIC PRODUCTION V E N T U R E S, L L C

Company Overview

SPV Solar One LLC

http://www.scientificproductionventures.com/


Land Costs. SPV has built expertise and relationships to minimize land costs through the utilization of brownfields.

Government Incentives. As part of solar project financing, SPV has developed methods to maximize the use of government incentives to improve project returns.

Development Costs and Time to Market Entry. SPV has created methods for reducing development costs and shortening the time to market entry (“Solar in a Box”) through focus on the small utility-scale market and eliminating a number of traditional development cost items.

Operational Costs. Through economies of scale and streamlined business process management, SPV generates incremental value for managing solar projects above what is normally possible for stand-alone projects.

Trusted Relationships. Nothing is faster than the speed of trust. Creating solar projects for Cherokee Fund 4, a billion-dollar private equity fund has allowed SPV to create solid relationships in all phases of solar development.

TWO EXAMPLES OF PROJECTS COMPLETED WITH CHEROKEE The Canton Landfill Solar Facility A 5.7MWDC project located on a 30-acre landfill in Canton Massachusetts. Southern Sky Renewable Energy, an SPV development partner was selected by the Canton Board of Selectmen to construct the solar facility on the town of Canton Landfill.

CANTON BEFORE SOLAR

At the time of completion, the project was the largest solar photovoltaic facility in the Commonwealth of Massachusetts and in New England. Summary is as follows:

• Structured as a 5-year tax equity partnership flip • Deferred developer fees paid out over 10 years • Permanent loan @8% for 15 years and a ten-year

bubble

• 6-month build time from start of construction to commercial operation

The solar plant was completed in 2013 and sold in the third quarter of 2015. Returns were in the mid-twenties. CANTON PROJECT COMPLETED

RAVENBROOK SOLAR FACILITY

A 5MW project located on a 35 acre closed landfill in Carver Massachusetts. Southern Sky Renewable Energy an SPV development partner was selected by the Carver Township to construct the solar facility on the town’s closed landfill. The solar plant was completed in 2014 and expected to be sold in second quarter 2016. Returns are expected to in the mid-twenties.



SPV SOLAR ONE LLC In the third quarter of 2011, Scientific Production Ventures LLC launched SPV Solar One LLC (SPV Solar One) as a wholly-owned subsidiary of SPV. SPV Solar One was formed by SPV to provide additional focus on its solar power plant development and investment business. The organization of SPV Solar One LLC is built around a broad set of core competencies. The company has developed a rigorous process for identifying suitable sites, acquiring land control, designing a suitable facility, constructing and activating a solar facility, and managing a solar facility. CORE COMPETENCIES FOR SOLAR DEVELOPMENT

PARTNERING MODELS

SPV Solar One LLC has developed a flexible solar strategy that allows it to use the “Solar in a Box” to work with or without a developer partnership. SPV Solar One LLC has three primary models including:

Project Identification and Due Diligence

Project Co-Development

Project Development

SPV has invested the last several years with consultants and partners such as Novogradac, Reznick Group, TetraTech, Think Energy, and Hunton and Williams in developing deal structures, legal and operating agreements, and several proprietary financial models. These models with more than a million cells of algorithms, formulas and data, allow SPV Solar One LLC to forecast knowledge and data based returns.

Sensitivity around variables can be readily reviewed until final numbers for projects are entered.

TEIR ONE SOLAR LLC

In the third quarter of 2012, SPV was released from the exclusivity agreement with Cherokee Partners; the SPV principals own SPV Solar One, and all of the developed solar intellectual property and relationships. SPV Solar One LLC formed Tier One Solar LLC in 2013 with a limited use license to execute its technology.

Tier One Solar was majority owned and managed by SPV Solar One LLC. Minority shareholders included RNK Capital LLC, and SunRay Power LLC. RNK works towards leading investments in early stage environmental compliance projects, including projects that generate environmental products and commodities, such as carbon credits and renewable energy credits. RNK was the largest trader of renewable energy credits in the U.S.

Launched in 2010 and headquartered in New York City, SunRay Power is a developer-owner-operator of photovoltaic (PV) solar systems on rooftops of commercial and industrial buildings, with projects operating or under development in New Jersey, Massachusetts, Pennsylvania, New York, California, and North Carolina.

ROOF TOP EXAMPLES IN THE COMPLETED PORFOLIO

Development Engineering FinanceProcurement & Construction

Operations

Site screening and selection

Site acquisition

Interconnection

Project management

Performance assessment

Initial project layouts

Systems engineering

Stamped engineering

Structured project finance

Contract management

Construction management

Licensed contracting

Module & inverter procurement

BOS procurement Routine maintenance

Performance optimization

Site security

Equipment repair

Permitting

Legal

Asset management

Projectaccounting

Strategic marketing

Regulatory affairs

Origination & bidding

TOS team possesses the required skill sets



TEIR ONE SOLAR LLC(TOS) Continued

Tier One Solar LLC formed a partnership with Hanergy Holding Group, Ltd. Hanergy is China’s largest privately held energy enterprise encompassing hydroelectricity, wind electricity and solar electricity generation and other energy related services. Hanergy has been making a major push into U.S. Solar having recently purchased two leading thin film manufacturers including MiaSole (California) and Solibro (Germany).

VALUE CREATION Nearly all of the solar project lifecycle components that determine the overall value of a solar project are contained in Stage 1 and Stage 3. Lifecycle components also represent the largest areas of competitive advantage for TOS. Solar Project Lifecycle Management

The Tier One Solar “Solar in a Box” model focuses on identifying special land sites (brownfields, landfills and other “undesirable” locations) for generating Utility-scale solar projects. These targeted sites significantly reduce the four major risks:

1. Acquiring, permitting and connecting the

land

2. Financing and building the project

3. Receiving contracts from the Utility to buy

power

4. Reuse Master Agreements to reduce project “soft costs”

SAMPLE SITES OF TIER ONE SOLAR, LLC

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

100.00%

DevelopmentPhase 1

73% of value

Land: 10%

Interconnect App: 3%

Power Purchase Agreement (PPA):

60%

DevelopmentPhase 2

14% of value

DevelopmentPhase 3

9% of value

Operations

4% of value

Interconnect Studies: 4%

Permitting: 10%

Construction: 4%Finance 5%

Operate 4%

Solar Project Development Value Contribution

LARGEST LAND FIELD ON WEST COAST



Tier One Solar LLC acquired a lease on the largest land field in the west coast and the 2nd largest in the USA (120 acres). Tier One LLC also acquire a contaminated sight in North Carolina (20 acres). Tier completed most of the predevelopment work on the sites including, building interconnects to the grid, obtaining 20-year power purchase agreements, engineering and design as well as environmental, water, land, air and building permits.

Tier One LLC was sold to James Mason, formerly founder of Parish Capital (See Management), in the 4th quarter of 2014 for cash and debt equaling approximately $5 million dollar. SPV Solar One LLC is working to form Tier Two Solar LLC, engaging in consulting and considering the grant of another limited license of its intellectual property.

EXECUTIVE MANAGEMENT

Isaac B. Horton III, Founder, Managing Partner. Dr. Horton has 32 years of management, technology, patents, international business and finance experience with 22 years of successful entrepreneurship. He has purchased companies, formed partnerships and launched joint ventures in 15 countries. After earning his Ph.D. in Synthetic Organic Chemistry from Indiana University, he worked at the DuPont Company as one of the first drug designers in 1984. He worked eight years for the Rohm and Haas Company, which was recently sold for $16 Billion. He held management in engineering manufacturing, and was the Marketing Manager for the Europe / Asia in the Electronics Division. He also held senior positions in Strategic Planning and Corporate Development, as well as managing the fiber optic business. His most recent company from SPV, Remote Light Inc., has secured more than 140 patents and won both local and national awards. Dr. Horton holds a B.A. from UNC-Chapel Hill and a Ph.D. in Synthetic Organic Chemistry from the Indiana University at Bloomington, IN.

Ahmed Shaikh, Chief Operations Officer. Mr. Shaikh currently oversees all day-to-day operations at SPV. He knows first-hand every single step along the way to operational excellence, from the vetting and selection of real estate sites for targeted growth to working with contractors on hundreds of new store openings to developing field personnel numbering in the many thousands. As Senior Vice President of Operations, Real Estate and Store Planning for Computer City, America’s second largest computer superstore retailer, he was personally involved in developing over 6,000 active team members. And as Regional Operations Manager for Comp USA, he directed the entire Midwest and Southern California regions expansion from 2 to 66 stores and $2 Billion in revenue. Mr. Shaikh holds both a B.S. in Accounting and a M.A. in Economics from the University of Sindh, Hyderabad, Pakistan.

Patricia Gerrick, Chief Investment Officer. Ms. Gerrick works with SPV Solar One’s CFO to develop funding sources for our solar pipeline. Ms. Gerrick founded Phoenix Griffin Strategies, LLC in 2009. The firm provides comprehensive outsourced investment services based upon client specific governance structure and investment objectives. Ms. Gerrick was appointed as first Chief Investment Officer for North Carolina responsible for oversight of assets totaling $85 Billion and achieved top decile and unprecedented risk adjusted returns during 2008 financial crisis through the innovative execution of customized multi asset class investment solutions across the global investable universe. Ms. Gerrick also served as member of Virginia Retirement System Investment Advisory Committee. Previously, Ms. Gerrick served as Chief Investment Officer for Indiana Public Employees Retirement System and as first CIO, she was responsible for establishment of an investment division and strategic oversight of a $10 billion



Investment program transition from 100% bonds to prudent person achieving top quartile performance within three years Ms. Gerrick received her Master of Business Administration from Columbia University and a Bachelor of Science in Economics from Fisk University.

Ian Stewart, VP Technology. Mr. Stewart is a seasoned technology expert with a broad background in all aspects of technology related business development. He is currently engaged with SPV Solar One to develop the company's go-to-market strategies for solar on brownfield and the supporting investment platform technologies. He has extensive experience and skills in taking new ideas to market and enabling emerging companies to make the leap from entrepreneurial idea to successful enterprise. Some of Mr. Stewart’s more recent engagements have included developing a go-to-market strategy for a company launching a new digital payments product line, and developing new market channels for an infrastructure services company. He has held numerous key management positions prior to becoming a consultant, including General Manager of a Fortune 500 manufacturing company, Managing Director of a global consulting organization, and Director of a large research and development group.

Jeff Swanson, Director of Operations. Mr. Swanson overseas the construction of SPS Solar One’s solar power plants. Prior to working with SPV Solar One Swanson had the role of Operations Manager to with Tetra Tech’s solar construction program. In his role of Operations Manager, Mr. Swanson reported directly to Tetra Tech’s COO. He was responsible for developing Tetra Tech’s solar construction strategy and implementing it through team building, business development, design coordination, estimating, contractual approach to performance and production guarantees, training and field operations. Swanson also worked with on the Tetra Tech construction program. His contributions led to the completion of 20 wind projects and revenue in excess of $500 million. He has experience in all phases of the construction cycle, including design development, geotechnical investigations, estimating, scheduling, subcontract negotiations, procurement and logistics, project mobilization, development of site-specific safety plans, site project management, QA/QC implementation, contract and subcontract management, and project closeout activities. His focus on customer relations was recognized in 2009 when Mr. Swanson was presented with Tetra Tech’s 2009 “President’s Gold Award for Excellence in Customer Service”.

James A. Mason, Jr., Former Chief Financial Officer. Mr. Mason was the CFO for SPV Solar One. Prior to joining SPV Solar One Mr. Mason was one of the three Managing Partners of Parish Capital, LLP nearly three billion dollars was under management. His experience stems from professional roles as a limited partner in private equity funds, a direct private equity investor, and a mergers and acquisitions advisor to private equity groups. Prior to founding Parish Capital, Mr. Mason served as Director of Private Investments for Duke University Management Company (DUMAC) ($6 billion under management) and was responsible for their private equity strategy, including sourcing, executing and monitoring investments. Prior to joining DUMAC, Mr. Mason worked at the investment banking firms of Houlihan Lokey Howard & Zukin and Bowles Hollowell Connor & Co., where he was responsible for managing middle market merger and acquisition assignments, primarily on behalf of private equity groups Mr. Mason received a BS from the University of North Carolina at Chapel Hill, where he was a Morehead Scholar, and an MBA from Northwestern University’s Kellogg School.


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SPV SPV Solar One Company Overview 2015 11 01 G