Opportunity Zone Capital Formation For New Energy Deployment: www.MyOZFund.org

I am neither a lawyer nor accountant. Safe Harbor The oral discussion and documents presented during this Opportunity Zone Finance Educational Keynote (or directly accessible from) e-mail or web pages hosted by presenters may contain forward-looking statements. These statements relate to future events or future financial performance. Any statements that are not statements of historical fact (including without limitation statements to the effect that the presenters or the presenters’ organizations "believe", "expect", "anticipate", "plan" (and similar expressions) should be considered forward looking statements. There are a number of important factors that could cause actual activities and results to differ materially from those indicated by the forward looking statements. The presenters and their representative organizations disclaim any obligation to update any forward looking statement. This presentation nor the oral conversation do not provide financial or legal advice - each party should consult their own professional legal and accounting advisors before entering into any agreements. I am neither a lawyer nor accountant.

Speaker & Support Partners Jon Bonanno Speaker CXO, New Energy Nexus & California Clean Energy Fund jon@calcef.org Craig Tighe Support Partner General Partner, Energy & Corporate Securities, DLP Piper craig.tighe@dlapiper.com Greg Rosen Support Partner Principal, High Noon Advisors greg.rosen@highnoonadvisors.com

My OZ Fund: fast, low-cost and easy empowering clean energy entrepreneurs to use and benefit from OZ finance Who We Serve: The “Clean Energy Entrepreneur”: Project developer offering some % of sponsor equity in a specific project Solar Energy storage Wind Hybrid EV Charging stations Bio Digesters Geothermal heat pumps Geothermal plants Lithium extraction facilities Carbon Avoidance Contracts/Demand Flexibility Purchase Agreements Light manufacturing facilities: high-tech HVAC assembly, etc. Clean Energy CEO offering Reg D/Reg A/Reg CF Series Seed – Z equity Investor looking to use the OZ structure for OZ clean energy assets (projects or companies)

How Opportunity Zone Finance Works Tax payers can get tax deferral (& more) …make a timely investment in… Qualified Opportunity Zone Fund (“QOF”) …which invests in… Qualified Opportunity Zone Fund Business (“QOZBiz”) or Business Property (“QOZBP”)

Up to 15% of Capital Gain Forgiveness Benefits Capital Gain Deferral Up to 15% of Capital Gain Forgiveness Forgiveness of the additional Capital Gains Deploy New Energy + Sustainable Assets Workforce Training + Empowerment No Risk Of Community Gentrification

Basics The Tax Cuts and Jobs Act of 2017 created “Opportunity Zones” Incentive: The Investment in Opportunity Act Final Zone Map: https://esrimedia.maps.arcgis.com/apps/View/index.html?appid=77f3cad12b6c4bffb816332544f04542 There are 8,761 zones throughout the US, including nearly all of Puerto Rico These zones are low income zones and the purpose of the Act is to encourage long-term patient capital to vitalize these areas. Updated and clarifying Treasury rules for the Opportunity Zone tax treatment expected April 2019 There is no capital limit on deal size, investor amount or fund size. Qualified Opportunity Zones remain in effect for 10 years following designation

Deferral of gain recognized on the original sale of up to 8 years AND Basics: Wow! Deferral of gain recognized on the original sale of up to 8 years AND Exclusion of up to 15% of the original gain AND An exclusion of ALL of the gain eventually recognized upon the disposition of the qualified investment Clean energy deployment

Basics: Terrible Eye Chart But Full Of Good Data New restrictions on 1031 Exchanges: only “like-kind” real estate for real estate, not for stocks, collectables or other CG events. Plus the original investment amount is capital gains free in OZ, unlike 1031. Applicable to all assets that create a capital gains liability for the investor 180 day period from capital gains liquidity (allowed to use the capital during this period without restriction or penalty) Define Terms: Qualified Opportunity Fund (QOF), partnership or C corp, self-certify with Form 8996, 2X annual “qualification test” Qualified Opportunity Zone (QOZ) Qualified Opportunity Zone Business (QOZB) Qualified Opportunity Zone Business Property (QOZBP) Eligible for Capital Gains deferral: individuals, C + S corps, partnerships, trusts, estates, regulated investment companies (RICs), REITs Capital Gains need to occur after 12/22/2017 and before 1/1/2027, the sooner the capital gains are deployed into a QOZF the better the financial results (before 12/31/2019 enables the 7yr window - +5% additional exclusion). All capital gains invested in QOZFs need to be elected with the IRS (Form 8949) at the time of investment FIFO accounting on multiple, time lapsed QOZF investments The nature of the original capital gains invested in the QOZF is captured and maintained until exercised (options, collectables, short-term, long-term, etc.) Short-Term Capital Gains: 10%-37% and Long-Term Capital Gains: 15%-20%

Earlier Sale Period of Deferral December 31, 2026 or... JSS Earlier Sale December 31, 2026 or... The period of capital gain tax deferral ends upon the earlier of: 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Partial Forgiveness & Forgiveness of Additional Gains Year 7 – Basis increased by 5% of the deferred gain Up to 85% of deferred gain taxed Additional 5% forgiven 12/31/26 - Remaining 85% of deferred gain recognized/taxed Year 5 – Basis increased by 10% of the deferred gain Up to 90% of deferred gain taxed 10% forgiven After year 10- Basis is equal to fair market value No tax on gains attributable to appreciation of investment Requires an election by tax payer JSS Sale Investment HELD FOR 5 YEARS HELD FOR 7 YEARS HELD FOR 10 YEARS 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028

Real Life Example Jan. 2, 2018 Taxpayer enters into a sale, generating $1M in capital gains (10%-37%) -Taxpayer is deemed to have a $0 basis in its QOF investment (deferred gain of $1M) -QOF invests the $1M in Qualified Opportunity Zone Property June 30, 2018  (Within 180 days) Taxpayer contributes entire $1M in capital gain proceeds to a Qualified Opportunity Fund 2021 2022 2023 2018 2019 2020

Real Life Example June 30, 2023 (After 5 years) Taxpayer's basis in investment in QOF increases from $0 to $100k  ($100k of deferred gain forgiven) June 30, 2025  (After 7 years) Taxpayer's basis in investment in QOF increases from $100k to $150k (additional $50k of deferred gain forgiven) Dec 31, 2026  (After 7 years) $850k of the $1M if deferred capital gains is recognized and taxed. The basis in QOF investment increases to $1M June 30, 2028 (After 10 years) Taxpayer's sells its investment for $2M Basis in the investment is deemed to be FMV The effect is no tax on appreciation in investment 2026 2027 2028 2023 2024 2025

Opportunity Zone Incremental Benefits JSS

Perishability of Incentives JSS Incremental IRR Year of QOF Initial Investment 

QOZB Excluded Businesses Can’t be a “Sin Business” A private or commercial golf course country club massage parlor hot tub facility suntan facility racetrack or other facility used for gambling any store the principal business of which is the sale of alcoholic beverages for consumption off premises.  NEIL

YES: equity in clean energy projects and companies Readily Identifiable Investment Types for Opportunity Zones Real Estate in Opportunity Zones Opening New Businesses in Opportunity Zones Expansion of Existing Businesses into the Opportunity Zones Expansion of Existing Businesses already in Opportunity Zones YES: equity in clean energy projects and companies Solar: new and repowering of residential bundles, C&I, community and utility Energy storage EV charging stations EV leasing companies CAPCs/DFPAs (carbon avoidance purchase agreements/demand flexibility purchase agreements) Wind

OK to combine with Other Tax Incentives Opportunity Zone LIHTC NMTC HTC RETC 1202 1031 ITC PTC JSS

Interactive Questions & Responses Q&A

Thank You jon@calcef.org energynexus.co