36 2ND J CORP DISCUSSION MATERIALS | DECEMBER 2014CARISMA PRINTING PROJECT

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Occasion

• New York City (NYC) Property Tax Abatement (PTA) Doubled

• 20% of eligible expenditures up to $62,500

• Tax credit applicable over 4 years

• That’s the bottom line

EXECUTIVE SUMMARY

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π Your (36 2nd J Corp’s) real estate is a prime candidate for a solar system that can offer attractive returns on capital

π Opportunity to transform an unused asset into a source of steady 10-20+% return, superior to other fixed income investments

π The solar installation process can be complicated, which makes a dedicated project partner like Anhinga, essential

EXECUTIVE SUMMARY

THE POWER INDUSTRY IS UNDERGOING A TRANSFORMATION

Like the horse & buggy, Walkman and floppy disk, the current power industry

model is inefficient and outdated.

7 Difficult to build and maintain

7 Inflexible7 Ecologically

unsustainable

7 Long distance transmission

7 Losses up to 15%

7 Concentrated risk and vulnerable to failure of a critical resource

Eliminates “Extension Cords” on a Large Scale

Wired Ethernet vs WifiThe inherent promise of solar PV DG

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AS YOU KNOW, 36 2ND J CORP’S REAL ESTATE IS IDEALLY SITUATED…

NYSERDA Targeted Solar Zones

Carisma is just south of the targeted zone

We may be able to apply for excepted expansion

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WHY CARISMA PRINTING ?

…WITH FAVORABLE ROOFTOP CHARACTERISTICS 95x95=9000 square feet Unobstructed view Southwesterly direction

Street Address: 43 2nd Ave, Brooklyn, NY 11215

[TBU – factoid]

95x95=9000 square feet Unobstructed view Southwesterly direction

Street Address: 43 2nd Ave, Brooklyn, NY 11215

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LOCAL INCENTIVES INCREASINGLY FAVORABLE

NYC SOLAR PROPERTY TAX ABATEMENT – EXTENDED AND DOUBLED On Sept. 23, 2014 Governor Cuomo extended the Property Tax Abatement (PTA)

for solar electric systems through January 1, 2017

Doubled from 10% to 20% of eligible solar system expenditures

By installing solar, building owners receive a four year PTA of 5% per year of the installed cost for 20% total

Abatements are capped at $62,500 per year or $250,000 total and may not exceed the owner's property tax liability for any given year

Solar in NYC is newly remunerative for you and/or your landlord in addition to its other benefits

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DRIVING RAPID GROWTH IN NYC SOLAR MARKET

Since the PTA went into effect in 2009, it has helped fuel the exponential growth of the NYC solar market

3 MW-DC to over 32 MW-DC today, a 66% compound annual growth rate

The PTA has been utilized in over 900 solar PV projects accounting for more than $75 million in investment

Now is the right time to invest in a solar system in NYC

COMMERCIAL SCALE INSTALLATIONS INVOLVE NUMEROUS COUNTERPARTIES AND DECISIONS

Installers

Selection active in NYC market

Inverter Vendors Panel Vendors

[Suniva]

Government

NYSERDA

In the typical commercial scale solar installation (250kw-1.5MW) there is

no standardization-- leading to literally millions of potential

equipment configurations/permutations

1. HTTP://WWW.SOLARINDUSTRYMAG.COM/ISSUES/SI1412/FEAT_01_POWER-BLOCKS-ENABLE-SOLAR-EPCS-TO-PIECE-TOGETHER-BIG-UTILITY-PLANT-WINS.HTML

FinancingPPALeaseNY-SUN

“Solarize”Forced Bundling

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THE SOLUTION

Streamline ProcessImprove Installer Accountability

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ANHINGA HELPS OWNERS NAVIGATE THE DECISION MAKING PROCESS TO ACHIEVE HIGH RETURNS

Proceed to invest in solar DG

Central Inverter

Microinverter

AC Panel

New 1000V Rooftop?

Standard <600V

Financing Decisions

PPA

Pay Cash

Receive Rent Payment[ ? ]

US-made

European

Low-cost less energy dense thin film?

Mono or poly crystalline

Asian

Tilt Rooftop

Flat Rooftop

SOLAR PV DECISION TREE

Emerging i.e. Tile

Rooftop Suitable

IRR makessense+

Emphasize / Represent LT IRR %

Throughout

kwHr growth rate 2.0% 3.0% 4.0% 5.0% 7.5%

Years 1-5 44,898$ 46,247$ 47,633$ 49,055$ 52,775$ Years 6-10 47,860$ 51,763$ 55,952$ 60,447$ 73,151$ Years 11-15 51,018$ 57,937$ 65,725$ 74,485$ 101,393$ Years 16-20 54,384$ 64,846$ 77,205$ 91,782$ 140,539$ Years 21-25 57,972$ 72,580$ 90,690$ 113,097$ 194,798$ Years 30-35 61,796$ 81,236$ 106,530$ 139,362$ 274,602$ Years 26-30 65,873$ 90,925$ 125,136$ 171,727$ 432,493$

Cumulative Returns, Gross (No NPV Applied)Data Point CUNY Map Tool

Anhinga Estimate

Building Footprint 9,692 9,000Project Usable Area 7,933 8,100PV System Size (kW-DC) 63.46 30.00 W/ft2 Total Footprint 6.55 3.33 W/ft2 "Usable Area" 8.00 3.70Comps NYC Avg. 3.91 3.91 BK Avg. Anhinga Analysis (1) 3.49 3.49FDNY Setbacks apply? Yes YesAll zoning M2-1 ?Empowerment Zone? No ?

Source: NYSERDA DG CHP Database

OUR PROPRIETARY ANALYSIS ENHANCES & ASSURES THE OUTCOME OF YOUR PROJECT

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Project Returns are based on assumptions namely growth rate of the underlying commodity, all in project costs (to a lesser extent the timing of those costs in early years) and finally discount rate applied to the future

Talking Points• Relevant to “payback period”• Payback Period depends on

assumptions

Value Stream Analysis Talking Points• By convention we assume 30 year

useful equipment life• Most components are under 30 year

manufacturer warranty• Ongoing O&M costs should be as

close to $0 as possible

Capacity Dimensions

2.0% 95,053$ 67,944$ 48,950$ 35,532$ 25,977$ 2.0% 126,000$ 70,860$ 40,392$ 23,322$ 13,633$

3.0% 103,099$ 73,696$ 53,094$ 38,539$ 28,176$ 3.0% 144,320$ 81,164$ 46,265$ 26,713$ 15,615$

4.0% 111,934$ 80,011$ 57,644$ 41,842$ 30,590$ 4.0% 165,882$ 93,290$ 53,177$ 30,704$ 17,948$

5.0% 121,637$ 86,946$ 62,640$ 45,469$ 33,242$ 5.0% 191,296$ 107,582$ 61,324$ 35,408$ 20,697$

7.5% 150,285$ 107,424$ 77,393$ 56,178$ 41,071$ 7.5% 276,790$ 155,663$ 88,731$ 51,233$ 29,948$

3.0% 5.5% 8.0% 10.5% 13.0% 3.0% 5.5% 8.0% 10.5% 13.0%

2.0% 134,911$ 67,299$ 34,122$ 17,572$ 9,184$ 2.0% 139,608$ 63,271$ 29,212$ 13,727$ 6,561$

3.0% 158,964$ 79,297$ 40,206$ 20,705$ 10,822$ 3.0% 168,350$ 76,298$ 35,226$ 16,553$ 7,911$

4.0% 188,297$ 93,929$ 47,625$ 24,525$ 12,819$ 4.0% 204,426$ 92,648$ 42,774$ 20,101$ 9,607$

5.0% 224,152$ 111,815$ 56,693$ 29,195$ 15,260$ 5.0% 249,849$ 113,233$ 52,278$ 24,567$ 11,741$

7.5% 355,288$ 177,230$ 89,861$ 46,276$ 24,187$ 7.5% 441,726$ 200,194$ 92,427$ 43,434$ 20,758$

3.0% 5.5% 8.0% 10.5% 13.0% 3.0% 5.5% 8.0% 10.5% 13.0%

Cumulative Value of Cash Flows at Year 15 Cumulative Value of Cash Flows at Year 25

Cumulative Value of Cash Flows at Year 30 Cumulative Value of Cash Flows at Year 35

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Value Stream Analysis

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ANHINGA EMPLOYS BEST PRACTICES TO ENSURE A SUCCESSFUL OUTCOME

Potential Solar Project Risks

Risk of Project Problems Cost Overrun (Change Order) Lack of availability of ideal hardware Delay Dispute with Contractor Subsidy Deadlines Missed

Potential Adverse Results Underperforming System Excess Maintenance Required – Downtime Financial Hurdles Not Met Payback Period Extended Project Success Jeopardized or Actual Loss

(Negative IRR) Occurs All Value Goes to Installer / Developer / Leasing

Company

System Production too Low

Net Costs too High

Value of kwHrs produced

disadvantageously split

-% IRR

Too much management attention and effort required

Anhinga Mitigation Strategy

Identify GoalsQuantify Financial ModelCompare Alternatives Aggressively Explore proven technologies

that are newly cost competitive or effective innovations that shift the value equation

Exert Leverage Throughout Process Financial Model Ask What If Contract thoroughly Maintain moral upper ground

Win as Team

VENTURE’S MANAGEMENT

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S. Ben Smolley, Founder Professional Background

Track record of selecting excellently performing investmentsStudying the solar industry since 2005 (9 years)Integrity

REPUTABLE INNOVATOR

Background

Harvard College Venture Capital in China Lehman Brothers Winslow Management / Winslow Green Funds (sold

to Brown Advisory 2010) Sunlight General Capital

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CONCLUSION

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Your real estate is a prime candidate for solar

A solar system offers an attractive return on capital

Opportunity to transform an unused asset into a source of steady 10-20+% return, superior to other fixed income investments

The solar installation process can be complicated. Anhinga’s project management methodology reduces risk for partners and increases their ROI

CARISMA PRINTING DISCUSSION MATERIALS | NOVEMBER 2014

Supplementary Materials

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OVERVIEW OF PROJECT PHASES

Planning Engagement Detailed Consultation

Vendor Selection and Due Diligence

Installation1 2 3 4 5

SELECTION OF COMPARABLE NYC PROJECTS

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Selected NYC Producing Solar Project Statistics

Developer Facility Address Location Facility Type Installed Capacity (kW)

Approx Sq. Ft W/ft2

Mercury Solar Systems LADS Avenue Associates, LLC960 Alabama Ave 11207 Brooklyn, NY Office Building 341.3 100,000 3.41 Solar Energy Systems, LLC Architectural Grille 48 2nd Ave Brooklyn, NY Manufacturing 312.6 65,109 4.80 Solar Energy Systems, LLC Film and Audio Recording stage359 Kingsland Brooklyn, NY Film and Audio Recording stage282.2 114,000 2.48 Absolutely Energized Solar Electric, Inc.Sunlight Clinton Realty 744 Clinton St 11231 Brooklyn, NY Distributor 220.0 59,095 3.72 OnForce Solar RiteLite 333 Stanley Ave 11207 Brooklyn, NY Whole Sale Durable Goods172.0 48,960 3.51 Safari Energy, LLC Extra Space Storage Brooklyn312 3rd Ave 11213 Brooklyn, NY Self Storage Units 126.0 41,715 3.02 Average 3.49 Median 3.46

Bright Power Information 1948 Troutman St. Queens, NY Information 352.6 59,432 5.93 Solar Energy Systems, LLC Forest City Enterprises 87-25 Queens BLVD Elmhurst, NY Construction 319.0EnterSolar Dykes Lumber 43-01 10th St LIC 11101 Long Island City, NY Lumber Yard 196.4 Average 5.93 Median 5.93

SolarCity GAL Manufacturing Bronx, NY Manufacturing 237.1Safari Energy,LLC Extra Space Storage Bronx 2875 Edson Ave Bronx, NY Self Storage Units 189.0 43,132 4.38 Average 4.38 Median 4.38

Average 3.91 Median 3.62

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