Mission Markets by Earth Loans

Mission Funds Platform
Joe.McHugh@Earth.Loans
Copyright © 2018, Earth Loans, Inc. All Rights Reserved.

Lending margins are razor thin.
Add 10% margin
without increasing prices.
Copyright © 2018, Earth Loans, Inc. All Rights Reserved. 2

Mission Markets are SEC-registered
funds that track investment into
market segments like an ETF.
Lenders can earn Mission shares
for lending into target markets.

Mission-based funds platform for
project finance markets & solutions
What’s Your Mission?
4Copyright © 2018, Earth Loans, Inc. All Rights Reserved.
Mission Markets
• Direct investment to priority markets
• Measure market adoption-to-goal
• Provide lender & consumer incentives
Features
• Publicly-listed investment funds
• Own shares in any Mission
• Opportunity Zone-eligible

Fund
Equity
Non-Fund
Equity
0 20 40 60 80 100
Building a Mission Market
Mission Shares Public Offering
• Fund Equity (FE)
– Funds raised via IPO
– 1 share per $1 invested
– Income reinvests in fund
• Non-Fund Equity (NFE)
– Shares issued post-IPO
– Up to 30% issued to partners
per $1 invested into Mission
Market
– 20% issued to Earth Loans
– Remaining 50% of shares
retired from supply,
increasing EPS
5
Measure What Matters
Incentive Supply
EPS Enhancement
Mission Cost = Share Supply

Go-to Market
Our lending partners
extend our reach.
Earth Loans creates a mission
to track and grow.
Lenders earn mission shares by
lending into the market.
Consumers earn mission shares
for buying mission products.
Marketers earn mission
shares by selling products.
EL
L
EL
CM
L
C
M
Our Distribution Advantage
* Currently seeking a pilot partner.

Total Addressable Market
• Pending pilot project
Distribution Strategy
• Lending partners
• Publicly-listed closed-end fund
Launch
Jan. 2019
Traction
Jan - Jun
Growth
July - Dec
Main
Focus:
Priority
Tasks:
Target
Results:
• Sign pilot partners
• Model potential markets
• Register lending partner(s)
• Establish RIA, fund & systems
• Go-to market
• 1+ lending partners
• 1+ marketing partners
• Functioning pilot project
April ‘19
Jan-Jun ‘19
June ‘19
Jul-Dec ‘19
Jul-Dec ‘19
Timeline

2015 - 2017 2018 2019
à Desire to shift demand with price
à Peer-lending and investing platform
for geothermal heating
à Expanded Goal: All planet-friendly
loans & investments
à Concept for Mission Market
à Financial model complete
à SEC-registered impact funds
managed by Earth Loans,
Registered Investment Advisor
à Seeking $250k - $1M
à Initial market partner(s)
à Form RIA, fund, file patent app
Business Idea Product Development Pilot & Seed Raise
Progress to Date

• We are seeking $250,000
• To launch our first Mission Market fund within six months.
Team
Building
Company
Progress
Q1 Q2 Q3 Q4 Q1 Q2
Hire Ops
Hire CIO
Identify Pilot Partner(s)
Establish RIA & CEF
Launch
4 loans
12 loans,
$300k loan
volume
Formalize pilot
partner plans &
expectations
$500k loan
volume,
Break-even
Invest
in IT
Market loans, mission market & issue shares
Recruit Strategic Advisors, Partners & Investors
Looking Forward

FAQs

Fund Equity
PRI Gap, $827
Eco Gap -
IPO Raise,
$200
Non-Fund Equity
Eco Gap -
Unissued, $488
Senior Debt, $735
Junior Debt, $519
Borrower Equity, $231
$2.312M Project Cost
+ $688k est. Eco-gap__
= $3M est. Project Total
• $200k est. Eco-gap raise
• $488k est. Eco-gap to
be raised at future date
Example: Capital Stack

Fund Equity
PRI Gap, 28%
Eco Gap -
IPO Raise,
7%
Non-Fund Equity
EPS Enhancement, 40%
Eco Gap - Unissued, 16%
Sr Debt,
2%
Consumer Debt
& Equity, 10%
EL Inc.,
5%
EL Fdn,
5%
Jr, 2%
• Non-Fund Equity
– 10% share issued per $1
invested into the target
market area
• Fund-Equity
– Full share issued per $1
invested into the Mission
fund
Example: Share Allocation

Example: Accounting
$ (000's)
Shares
Issued
Share
Balance
Fund
Equity %
Project Total 2,312 2312 2312
Lender
PRI Gap 827 827.0 35.8%
Junior Debt 519 51.9 2.2%
Senior Debt 735 73.5 3.2%
Lender Total 2081 952.4 1359.6 41.2%
+ Consumer Equity 231 23.1 1.0%
Project Total 2312 975.5 1336.5 42.2%
Consumer Bonus 2081 208.1 1128.4 9.0%
Share Issue Sub-total 1183.6
Earth Loans Inc. 118.4 1010.0 5.1%
Earth Loans Fdn 118.4 891.7 5.1%
Share Net v. EPS-E 2312 1420.3 891.7 61.4%
61% 39%
Add in Eco-Gap 688
IPO Raise 200 200 488
Future Offering 488 TBD
• 61% shares issued
• 39% EPS Enhancement
• IPO Raise for Eco-Gap
– 1 share per $1 raised
– Future shares offered at
floating rate to close gap
– Shares sold above par
produce EPS-E shares

Project Finance Status Quo
Returns
Senior Debt
Junior Debt
PRI Gap
Equity
Project Capital Stack
Broader Objective
• No public investment
• Returns limited within stack section
• No progress accounting towards broader objective

Mission Market Project Finance
Returns
Senior Debt
Junior Debt
PRI Gap
Equity
Project Capital Stack
Broader Objective
Debt Service
Free Cash Flow
Returns > Debt Service
• Public investment participation
• Performance accounts for all market
investment, including non-fund dollars
• Progress towards mission drives demand
• Include any income stream
• Income & non-fund investment
provide leverage
• Share returns > Debt Service
Other Income

Information Drives the Market
16
We pay shares for information
to account for mission progress.
Unissued partial shares act as fund leverage.
Borrowers Save Money
• 10% of purchase price paid
in shares
Investors Boost Returns
• IPO shares > income
Lenders Make Money
• 10% of loan funds paid in
shares
Contractors Make Money
• Marketers can earn shares
too

(000’s) Q1 Q2 Q3 Q4 YEAR Q1 Q2 Q3 Q4 YEAR
Projected
Headcount
1 1 1 1 1 2 3 3 3 3
Projected
Loan Volume
0 0 100 300 400 500 750 1,000 1,500 3,750
Revenue 0 0 18 54 72 90 135 180 271 676
Salaries +
Overhead
38 10 10 10 40 50 90 90 90 320
Other
(Professional Fees,
Rent, Utilities,
Travel, etc.)
3 3 3 3 12 5 6 7 8 26
Cash Burn (41) (13) 5 41 (8) - - - - -
Total Cash
Burn
(41) (54) (49) (8) -
• Seeking $250,000 seed for legal, accounting, operations & marketing
• Establish RIA, Closed-end Fund & initial Mission Market
• Launch pilot Mission Market within six months (July 2019)
Use of Proceeds

Earth Loans Founding Team
Seeking Ops, CIO & AdvisorsJoe McHugh, Business Lead
- MBA, Babson College
- Investment Advisor
- Award-winning salesman
Headshot

Competition
Low Environmental Impact High Environmental Impact
Multi-segment
Asset Mgmt
Single-segment
Asset Mgmt
We are stronger than the competition in measuring and stimulating market growth.
We are threatened by the competition in access to capital and operational efficiency.

Impact
20
• Earth Loans is a mission-driven funds manager
• Mission funds accomplish a social mission while
providing a return to investors and incentives to
borrowers and lenders to participate
• Earth Loans Foundation receives equal share
allocation to Earth Loans, Inc.
• Foundation supports nature conservation that
does not produce sufficient income to support a
market

Averages
Per Loan Origination Fee Split 3% ~ $750 per $25,000 loan
Per Loan Servicing Fee Split 50% ~ $5-10/mo
Per Issued Share Participation 15% ~ par value of $1 per share
Net Revenue: $180,300 per $1M loaned
Cost
• 30-50% share issuance per $1 of project cost split between lender / investor,
borrower, contractor
• Cost limited to fund formation and accounting
Overhead Initial Ongoing
Fund Formation & Mgmt $20-50k $10-25k per year
Unit Economics

Financials / Budget
* No per unit COGS. Expenses are accounting related.
Revenue (000's) Q1 Q2 Q3 Q4 Year1 Q1 Q2 Q3 Q4 Year2
Loans ($25k per loan) - - 4.0 12.0 16.0 20.0 30.0 40.0 60.0 150.0
Loan Volume - - 100.0 300.0 400.0 500.0 750.0 1,000.0 1,500.0 3,750.0
Loan Orig. (3%, $750) - - 3.0 9.0 12.0 15.0 22.5 30.0 45.0 112.5
Loan Svc. ($7.50 est.) - - 0.1 0.3 0.4 0.5 0.7 0.9 1.4 3.4
Equity Part. (15%) - - 15.0 45.0 60.0 75.0 112.5 150.0 225.0 562.5
Total Revenue - - 18.1 54.3 72.4 90.5 135.7 180.9 271.4 678.4
Gross Profit - - 18.1 54.3 72.4 90.5 135.7 180.9 271.4 678.4
Gross Margin 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Expenses (000’s) Q1 Q2 Q3 Q4 Year1 Q1 Q2 Q3 Q4 Year2
Fund Formation 28.0 - - - 28.0 - - - - -
Fund Accounting 3.0 3.0 3.0 3.0 12.0 5.0 6.0 7.0 8.0 26.0
Marketing 5.0 3.0 3.0 3.0 14.0 5.0 10.0 15.0 20.0 50.0
Personnel 9.0 9.0 9.0 9.0 36.0 50.0 90.0 90.0 90.0 320.0
IT - - - - - 12.9 29.7 68.9 153.4 264.9
Total Expenses 45.0 15.0 15.0 15.0 90.0 72.9 135.7 180.9 271.4 660.9
EBITDA (45.0) (15.0) 3.1 39.3 (17.6) 17.6 (0.0) - (0.0) 17.5
Net Income (Loss) (45.0) (15.0) 3.1 39.3 (17.6) 17.6 (0.0) - (0.0) 17.5

Current Partners: Target Partners:
Partners & Targets

Example Market Opportunity
Combined Water & Sewer / Company
Opportunity:
• Legislatively created market opportunity to
replace hard surface with porous surface in
order to cut cost of processing storm water
• Detroit DWSD Fee: $750/acre
Problem:
• High up-front cost requires extended term
loan to yield savings on impervious surface
fee
• Exotic solutions have few lenders
Solution:
• Extended term loans for impervious cover
removal, water cisterns, bioretention runoff
& ponds, permeable pavement, detention /
retention basin
• $35k, 5Y, 6.5% = <$700/mo
• $65k, 10Y, 6.5% = <$750/mo
• $100k, 20Y, 6.5% = <$750/mo

Fund Management Business Model
Sales Strategy: Platform approach, Engage
municipal leaders, lenders, investment advisors,
student groups
Revenue: fund participation, loan servicing and
origination fee split with lenders
Operating Margin Strategy:
• BE on fee split, growth via fund participation
Monetization

• Concentrating risk in an initial pilot market
• Consider a basket of three funds to start?
• Securing pilot market lending partners
• Offer a 10% share incentive to lender partners
per $1 loaned to target borrowers
• Marketing the message to investors
• Target impact-minded investors to start
Challenges & Risks

New Norm:
Impact
Investing
$60T Global
infrastructure
update needed
Inflation
needed
to
stimulate
growth
Crypto
markets
à
global
markets
consolidation
Why Now?

Mission Markets by Earth Loans

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