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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. EcoSmart Certified Properties. Eric Doub, CEO and Founder Eric.Doub@EcoSmartHomes.com
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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 EcoSmart Certified Properties Eric Doub, CEO and Founder Eric.Doub@EcoSmartHomes.com 303-440-7176, 303-550-6001
Vision EcoSmart benefits people and the planet through energy and performance upgrades for existing buildings and envisions achieving national scale with significant profitability. Mission 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. Goal by 2018 Upgrade 20,000 properties per year and generate revenues of $25M
Leaders in Technology • 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 Doubco-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.
Building Performance Upgrades, At Scale Building Performance Upgrades, At Scale Production by: Intelligence by: Licensing Partners Contractors EcoSmart Certified Properties • 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 • 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
Building Performance Upgrades Implemented by Licensing Partners 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 Intelligence by 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 • 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
Market Size Markets • One Trillion Dollarsof lending for energy efficiency next 10 years in the US. (1) • Commercial Retrofits Potential Market next 10 years: $220 billion(2) • 80 million US homes need energy upgrades Market Segments • Property Management Companies • REO (Real Estate Owned) • Home Owners Associations • Large Remodeling Contractors • Real Estate Investors (1) Gilbert P. Sperling, U.S. Department of Energy, Colorado Energy Efficiency Finance Summit, August 2010 (2) Pike Research – Energy Efficiency Retrofits for Commercial and Public Buildings 3Q/2011
Market Trends Markets • Commercial Retrofits currently growing at a rate of 26% percent per year. (Rocky Mountain Institute) • By 2020, the market for retrofits in commercial buildings will reach $152B worldwide. (Pike Research) • Growing awareness of energy efficiency benefits by general population, corporations and governments point to a sustainable positive trend in the industry • 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 Legislation requiring benchmarking of energy use and public disclosure thereof • CaliforniaAssembly Bill 1103. Affects non residential buildings and reports are required since January 2012 • Austin TXCh 6,7. Affects non residential buildings and reports are required starting June 2012 thru 2014 progressively • Philadelphia PABill 120428. Affects large commercial buildings and reports will be required starting June 2013 • Minneapolis MNBill is being drafted and would affect state and commercial buildings 2013 thru 2016 • Boulder COCity recruits commercial building owners to develop standard procedures for energy performance ratings and regulations for 2014 • Seattle WA Ch 20.920. Affects multifamily and commercial buildings and reports are required since April 2010 • WashingtonState Bill 5854. Affects non residential and state buildings and reports are required since January 2011 • New York CityLocal Law 84, Bill 476-A.. Affects commercial buildings and reports are required since May 2011 • Washington DCCAEA. Affects non residential buildings and reports are required starting July 2011 thru 2014 progressively • San Francisco CACh.20. Affects commercial buildings and reports are required since October 2011 thru 2014 progressively • OregonHouse 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.
Competitors • No single Company with more than 10% of market share * • (*our research based on available data) • Companies in Local Markets • No Company with repeatable and scalable Integrated Solution Model • Competition in the US • Next Step Living - MA (raised $18.2M in December 2012) • Green Homes America – FL, SC, NY, NJ, VA, CA, UT • The Mark Group– PA, NJ, DE • Well Home – CA, CO, MD, MI, NH, MA, PA (Not Integrated Solution) • Mom and Pops Nation Wide • 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 • Comfort • Health • Performance Certified Property • Problem • Toxic leaky house • Lousy air • High energy bills • Cold and hot rooms FutureFit Your Home™ • Bottom line Benefits • Energy savings, money savings • Safer for residents • Comfortable temperatures • Better air to avoid asthma and allergy problems • Safeguards from escalating bills and extreme weather • Spend less on energy, more on food and health care • EcoSmart Certified Property • Solution • EcoSmart Integrated Solution • Assessment • Engineered Scoping • Financial Solutions Package • Upgrades • Fast implementation • Verifying Performance • Maintaining Performance
Value proposition for Commercial • Performance Health • Value Certified Property • Problem • High energy cost • Cold or hot areas • Low air quality • Toxic workplace • Low productivity environment • Bottom line Benefits • Healthier employees • Less absence due to illness • Fewer restricted activity days • Higher productivity • Corporate Environmental Stewardship and Competitive Edge • Lower Costs of Maintenance and Operation • Longer contracts and higher retention • Solution • EcoSmart Energy Coaching • Rapid and complete assessment • Optimal Engineered Priced and Actionable Scope • Financial Solutions Package • Faster implementation at least cost • Reliable certified performance
Validation from important market player Real-time 2012 Example Prospect: Waypoint Segment:REO, Rental to Rehab Portfolio:1,800 homes growing at the rate of 35 homes/day with $1B secured Jan. 2012 to buy more $ 31,000,000 Contract opportunity for EcoSmart Certified Properties over 5 years What they say: • “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” Colin Wiel – Co Founder Gary Beasley – Managing Director
Value proposition for Property Management Companies And Real Estate Owned Portfolio Companies • Problem • No in-house capability for one-stop Building Performance solutions • Fast-changing technologies and practices • Need for verified results with tangible measurements and returns • Solution • 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 Benefits • Optimal results at controlled budgets and short implementation times • Tenants who pay lower energy bills don’t fall behind on rent • Happier tenants stay longer • Houses don’t stay empty as long “Green properties rent and sell faster, and for more.” - Early EcoSmart investor and Boulder landlord
Financial Value Proposition for Investors • Markets • Addressable markets in the Trillion dollars range • Market is durable and trends to expansion • Minimal current competition • Low risk of competition based on piracy or artificially underpriced services • Company • Eric Doub’s connections and national reputation continue to generate opportunities • Well positioned for large contracts in the hundred million dollar range • Because of reputation Company has been attracting top talent in the US • Sustainable Competitive Advantage • ESH has first-mover advantages • ESH has revenue based on a repeatable and scalable model • Software and I.P. protectable • Investment Returns • Potential for rapid growth in market share • Market share growth generates shareholder value • 5X to 7X returns expected for investors in year 5
TripleBottom Line for Investors • 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 • 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 hardship • Community 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: • 72% of all electricity • 40% of primary energy • 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) Seed Round: Over $1.2M raised Objectives Achieved: Launch and Develop Business Model; Build Up Revenue Stream Opportunities; Producing & Positioning • EcoSmart upgrades over 165 test field homes • Develops and proves systems for licensable platform • Positions for multi-million-dollar contracts • Quality of services is illustrated by high rates of customer satisfaction • The next capital leverages talent and converts existing and new market opportunities into accelerating revenues
Revenue Projections – 1 Year Phase I Phase II • Continue to ramp up sales • Develop Platform • License to first “test” Partners • Position for Portfolio Markets • Launch Company & Prove Systems • Earn Revenue in Local Markets Operational Break Even 3M Post Money Revenues (Trailing 12 months) 2M Local Direct Services: Project Manager-Based Jobs >$30K Phase II Continues $2M Jobs on cue 165 Homes to date 1M Project Manager-Based Jobs: >$30k 100% Annual Growth Local Direct Services: Home Performance Upgrade Jobs <$30K Home Performance Upgrades: <$30k Q1 Q2 Q3 Q4 Year 1 Note: No Commercial sector revenues included Present (This Round Funded)
Phase II(next) Second Round Offer: $950,000 Objective: Increase revenues from $1M to $5.5M through engaging opportunities built up in Phase I • 2nd Phase of Platform Development • 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 associations • Trials with Licensing Partners
Phase III Positioning for Liquidity Event Third Round Offer: $3M Objective: Increase revenues from $5.5M to $25M • Ramp up with strategic partners • Revenues of $25M projected in year 5 and $7M in EBITDA • Phase 4: Sale to strategic or financial buyer • Create potential for sale to strategic or financial buyer in year 4+ • Expected 5X to 7X returns to investors 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.
Revenue Projections - 5 Years Position for Liquidity Event Projected 5X-7X Returns to Investors Phase II Regional Markets Phase III National Markets Phase IRegional Markets 25M 20,000 Buildings/year 20M Scale 15M Post Money Revenues (Trailing 12 months) Licensing Technology Nationwide to Qualified Partners 10M Develop Launch & Grow 5M Local Direct Services: Profitable Division for Continuous Platform Enhancement Local Direct Services Profitable Division for Continuous Platform Enhancement 165 Buildings Upgraded 165 Buildings Upgraded Operational Break Even Year 5 Year 4 Year 1 Year 2 Year 3 Operational Break Even Present (This Round Funded) Note: No Commercial sector revenues included
Growing Through Measured Steps Phase I Phase II Phase III Launch Develop Scale - Continue to ramp up sales - Develop Platform - License to first “test” Partners - Position for Portfolio Markets • - Launch Company & Prove Systems • - Earn Revenue in Local Markets - Grow Sales in National Markets - Continue R&D in Local Markets EcoSmart Certified Properties With Licensing Partners EcoSmart Homes Additional Rounds 2015 Forward LBS Round B Seed Capital 2009-10 2013 Round C Round A 2014 2010-12 LBS Licensing-Based Services National Market Substantial growth above expectations in Q1 2013 LBS Residential BPUs ContinuedGrowth and/orFull or PartialExit Options Licensing-Based Services “Test Market” Round C $ 3M PMB Round B $945K (Initiating Q1 2013) Founders$900K Growth or Acquisition Capital Round A $1.1M Project Manager-Based Remodels Round A accomplished incrementally Residential Building Performance Upgrades Sizes of boxes do not represent revenues. For revenues please refer to the graphs on the page above.
1025 Rosewood Avenue • Boulder, CO 80304 • www.EcoSmartHomes.com • Eric Doub, CEO • 303-440-7176 • Eric.Doub@EcoSmartHomes.com