Green Matters Energy Technology by Concord Business Plans

A New Paradigm of Energy Efficiency BUSINESS PLAN | 2019

– Notice – The information presented in this document is highly sensitive and confidential and is to be used by authorized parties for the purpose of determining a preliminary indication of interest in Green Matters Technologies, Inc., (“Green Matters” or “the Company.”) The recipient of the Business Plan agrees by its receipt not to reproduce, duplicate, or reveal, in whole or in part, information presented herein without the written permission of the Company. The information contained in the Business Plan was provided by the Company and other sources. It has been reviewed, approved, and released by the Company, who assumes responsibility for its contents. Estimates and projections contained herein have been prepared by the management of the Company, involve significant elements of subjective judgment and analysis, and are based on certain assumptions. Actual results may vary from estimates and projections and these variations may be material. No representation or warranty, expressed or implied, is made as to the accuracy or completeness of the information contained in this overview, and nothing contained herein is, or shall be relied upon as, a promise or representation, whether as to the past or the future. The Business Plan does not purport to contain all of the information that may be required to fully evaluate the Company for a potential business relationship, and any recipient thereof should conduct its own independent analysis and due diligence process. THIS PRESENTATION IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY SECURITY. For additional information, contact: GREEN MATTERS TECHNO LOGIES, INC. Michael Caetano 67 East 5th Avenue Vancouver, BC V5T 1G7 Canada Tel: 778-870-4401 Email: mcaetano@greenmattersinc.com This Business Plan was prepared by:

CONCORD BUSINESS DEV ELOPMENT INC. 500-666 Burrard Street Vancouver, BC V6C 3P6 Canada Tel: (604) 689-2556 Fax: (604) 689-7758 Website: www.concordbusiness.com Email: info@concordbusiness.com

GREEN MATTERS BUSINESS PLAN

BUSINESS PLAN HIGHLI GHTS

Name of Company

Green Matters Technologies, Inc.

Business

Production of a clean-tech appliance that can harness waste heat energy and deliver domestic hot water at highly efficient rates.

Technology

Heat Recovery Water Heater (“HRWH”), designed to convert the wasted heat rejected from existing cooling loads into useful domestic hot water for various types of facilities.

Target Markets

Hospitality sector in warm climates; Commercial buildings in environmentally-progressive jurisdictions; Hospitals and healthcare facilities with specific hot water requirements and large annual demands of domestic hot water.

Market Opportunities

Global water heater market projected to reach $US48.5 billion by 20251; Investment in clean-tech reached $332.1 billion in 20182; Sustainability awareness, policy reforms and financial incentives continue to increase3.

Value Proposition

55-65% savings in energy costs; 84-88% reduction in energy consumption; 54-66% reduction in net-fuel consumption.

Funds Required

To be added.

Revenue Projections

To be added.

TOTAL REVENUES AND O PERATING INCOME To be added.

“Water Heater Market by Type, Application, and Distribution Channel: Global Opportunity Analysis and Industry Forecast, 2018 - 2025” Allied Market Research, 2018. 2 “Clean Energy Investment Exceeded $300 Billion Once Again in 2018.” BloombergNEF, 2019. 3 “Global Sustainability Tax Primer.” Ernst & Young, 2016. 1

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TABLE OF CONTENTS 1 1.1 1.2 1.2.1 1.3 1.4 1.4.1 1.5 1.5.1 1.6 1.7 1.8 1.9

EXECUTIVE SUMMARY .......................................................................................................................... 1 Company Overview ......................................................................................................................................1 The Technology ............................................................................................................................................2 Proof of Concept ..................................................................................................................................2 The Machine.................................................................................................................................................3 Market Opportunities ..................................................................................................................................4 Water Heater and HVAC Markets .......................................................................................................4 Target Markets .............................................................................................................................................4 Opportunities Across Commercial Spaces ...........................................................................................5 Capital Requirement ....................................................................................................................................6 Revenue Summary .......................................................................................................................................6 Return on Investment ..................................................................................................................................6 The Opportunity ...........................................................................................................................................6

CORPORATE OVERVIEW ........................................................................................................................ 7

2.1 2.2 2.3 2.4 2.5 2.6

Corporate Data .............................................................................................................................................7 Executive Management................................................................................................................................7 Mission .......................................................................................................................................................10 Corporate Structure ...................................................................................................................................11 Milestones ..................................................................................................................................................11 Future Outlook ...........................................................................................................................................12

BUSINESS MODEL ................................................................................................................................14

3.1 3.2

Business Verticals .......................................................................................................................................14 Software as a Service (SaaS) Model ...........................................................................................................14

GREEN MATTERS PRODUCT .................................................................................................................15

4.1 4.1.1 4.2 4.2.1 4.3 4.3.1 4.4 4.5 4.5.1 4.5.2 5 5.1 5.1.1 5.2 5.2.1 5.3 5.4 5.4.1 5.4.2 5.5 5.5.1

The Heat Recovery Water Heater ..............................................................................................................15 An Alternative to Inefficient, Fossil-Fuel Based Boiler Systems .........................................................16 The Technology ..........................................................................................................................................17 Patents...............................................................................................................................................18 The Applications .........................................................................................................................................18 Proof of Concept ................................................................................................................................19 The Advantages ..........................................................................................................................................21 Operations..................................................................................................................................................23 OEM Components ..............................................................................................................................23 Warehouse Facility and Future Expansion.........................................................................................23 MARKET AND INDUSTRY ANALYSIS ......................................................................................................24 The Rise of Green Building Activities .........................................................................................................24 Green Building Activities by Region ...................................................................................................25 Global HVAC Markets .................................................................................................................................29 Valuation Analysis .............................................................................................................................30 Investment in Renewable Energy and Smart Energy Tech.........................................................................33 Global Sustainability ...................................................................................................................................34 Global Carbon Regimes .....................................................................................................................36 Sustainability Incentives in Canada ...................................................................................................38 Energy Consumption in Commercial Buildings ..........................................................................................40 Healthcare Facilities ..........................................................................................................................41

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5.5.2 5.5.3 5.5.4 5.5.5 5.6

Lodging Facilities and Hotels .............................................................................................................43 Recreational and Sports Facilities ......................................................................................................47 Mercantile and Shopping Centres .....................................................................................................48 Educational Facilities .........................................................................................................................50 The Opportunity .........................................................................................................................................50

COMPETITIVE LANDSCAPE ...................................................................................................................51

6.1 6.2

Competitive Analysis ..................................................................................................................................51 Competitive Advantage ..............................................................................................................................52

SALES AND MARKETING PLAN..............................................................................................................53

7.1 7.1.1 7.2 7.2.1 7.3 7.4 7.5 7.5.1 7.6 7.6.1 7.6.2 7.7 7.8

Target Markets and Consumers .................................................................................................................53 Current Carbon Regimes by Region ...................................................................................................53 Sales Plan ...................................................................................................................................................54 Customer Acquisition Process ............................................................................................................54 Strategic Marketing Plan ............................................................................................................................54 Corporate Positioning ................................................................................................................................56 Offline Marketing .......................................................................................................................................56 Marketing Collateral..........................................................................................................................56 Online Marketing .......................................................................................................................................56 Web Development Plan .....................................................................................................................56 Online Marketing Strategies..............................................................................................................56 Industry Associations .................................................................................................................................57 Tradeshows and Events..............................................................................................................................58

FINANCIAL ANALYSIS ...........................................................................................................................59

8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8 8.9 8.10 8.11

Capital Requirement ..................................................................................................................................59 Use of Proceeds..........................................................................................................................................59 Revenue Assumptions ................................................................................................................................59 Revenue Summary .....................................................................................................................................59 Profitability and ROI ...................................................................................................................................59 Income Statement ......................................................................................................................................59 Balance Sheet .............................................................................................................................................60 Cash Flows ..................................................................................................................................................60 Benchmarks and Breakeven Analysis .........................................................................................................60 Ratios Analysis............................................................................................................................................60 Sensitivity Analysis .....................................................................................................................................60

BIBLIOGRAPHY ....................................................................................................................................61

APPENDIX ............................................................................................................................................70

10.1 10.2

Marriott Resort Testimonial Letter ............................................................................................................70 Annual Hot Water Consumption in BC Hospitals .......................................................................................71

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1 Executive Summary Green Matters Technologies Inc. Overview 1.1 COMPANY OVERVIEW Green Matters Technologies Inc. (“Green Matters” or the “Company”) was incorporated in British Columbia in December of 2011 as a private original equipment manufacturer (“OEM”). The Company was founded by Michael Caetano to capitalize on the growing clean technology (“cleantech”), water heater and heat transfer technology markets. In 2011, Mr. Caetano assisted in raising capital for an innovative cleantech company called Energy Recovery Systems Inc. (“ERS”), which had developed a heat recovery domestic water heater (“HRWH”). With the assistance of Mr. Caetano and Green Matters, ERS launched the HRWH into the market. Green Matters has now acquired the HRWH along with all assets and intellectual property (“IP”) from ERS through a share exchange. As a result of the transaction, the HRWH and its technology is now 100% owned by Green Matters. The Company’s proprietary heat recovery technology uses minimal electricity to drive heat pumps that capture waste heat energy from water chillers to be reused for hot water/space heating needs. Green Matters aims to target the heat, ventilation, and air conditioning (“HVAC”) segment of the market by providing an efficient, cost-effective, energy-saving and emission-free solution. The Company has successfully completed its initial sales order in November 2014 and has since been operational in the San Juan Marriott Resort & Stellaris Casino in Puerto Rico. After nearly a decade of Research & Development (“R&D”) and a successfully established Proof of Concept (“PoC”) at a 525-room hotel, Green Matters seeks to expand its operations and sales strategy across the globe.

The Company’s goal is to be the driving force behind energy conservation and the preservation of natural resources through significant reductions in energy consumption within the HVAC marketplace.

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With the first order received in November 2014, the Company continues to conduct data analysis on the operating efficacy of the HRWH for its initial customer and continues to develop the product, improving its data reporting capabilities and effectiveness. The Company has also filed for and received a number of patents in the United States and Canada (see: 4.2.1 Patents.) Investment in clean technology has been trending for several years as nations, governments, and society at large become more aware of the damaging effects that pollution and carbon dioxide (“CO2”) emissions have on the environment. In an attempt to prevent and/or delay these damaging effects and create a more sustainable environment, nations and government agencies have been steadily introducing new proposals and programs to aid in reducing emission levels, namely by offering financing options for research and development, as well as offering financial incentives and/or rebates for cleantech investments by businesses and consumers.

1.2 THE TECHNOLOGY The Company’s HRWH offers an efficient, cost-effective, and green solution that allows for heat energy, otherwise released as waste, to be recaptured into heating domestic water to be used for other purposes in the facility. The concept of the HRWH is a cleantech appliance that can harness waste heat energy and deliver domestic hot water at highly efficient rates. After a period of research and development, the Company designed the entirely new HRWH in October 2012. After soliciting interest from prospective customers and the initial sale to the Marriott hotel in San Juan, Puerto Rico, Green Matters is ready to launch the HRWH into the global water heater market. The initial operating performance of two HRWH’s at the Marriott hotel have generated the following results:

1.2.1 Proof of Concept

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Green Matters’ HRWH machines can generate savings of $10,000 to $20,000 per month with a payback period including installation costs between 2 to 3 years on hard savings, not including any government incentives (many federal and provincial incentives have been created in the last five years – a thorough overview can be found in 5.3.1. Global Carbon Regimes.) The payback period depends on the installation costs, which can vary significantly between sites and the amount of backup or redundant capacity that is required. Fluctuations between peak demand and average demand, along with the size of the hot water tanks in each site, also affect the size of equipment required and subsequently, the payback period.

1.3 THE MACHINE Green Matters’ HRWH is purpose-built to heat domestic potable hot water using the waste heat from a water chiller cooling loop. It is designed to heat incoming make-up water directly from the source for highest efficiency. The patented condenser piping enables high condenser at full-load, up to 33⁰C/60⁰F. The direct heating of water results in a higher Coefficient of Performance (“COPH”) (a ratio of useful heating provided over work required; a higher COPH equates to lower operating costs/increased savings.)

Optimized to heat water to 140⁰F or higher, eliminating the need for a boiler in the heating system.

Optimized to heat water to 150⁰F, ideal for hospitals or facilities with sterilization requirements.

The HRWH generates a higher COPH, resulting in lower energy costs and increased savings.

The HRWH is optimized to heat water up to 60⁰C/140⁰F, eliminating any need for a boiler in the heating system. Existing heating equipment can be used for redundancy or, if feasible, removed. The HRWH can also produce hot water up to 65⁰C/150⁰F and incoming water can be up to 63⁰C/145⁰F to maintain tank temperature when demand is low. The ability to heat water to 150⁰F is a clear advantage over competitors with limited heat recovery features, particularly in targeting hospitals and healthcare facilities which require water heated to 150⁰F for sterilization purposes. Furthermore, the HRWH features a double walled condenser to meet code requirements. Equipment with a single walled condenser requires a secondary heating loop to ensure the potable water cannot become contaminated with refrigerant oil as required by building codes in many jurisdictions. This adds considerable installation and maintenance costs, as well as reducing the overall efficiency of the heat recovery heating system. The 150-ton and larger HRWH machines have two independent compressors and isolated refrigerant loops providing increased reliability. Maintenance on one half can be conducted while the other half provides heat. Evaporator plates can be separated for cleaning in the event the cooling loop becomes fouled.

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1.4 MARKET OPPORTUNITIES 1.4.1 Water Heater and HVAC Markets Participants in the water heater and HVAC markets have been producing increasingly efficient products for the past several years. To date, there has not been a manufacturer that devotes its products and technology to capturing waste heat energy from water chillers to be reused for water and/or space heating purposes. More importantly, HVAC equipment is present in virtually every building/facility – in homes, offices, and large commercial facilities such as hotels, hospitals and recreational facilities. According to Allied Market Research, the global water heater market was estimated at US$32.6 billion in 2017 and is projected to grow to US$48.5 billion by the end of 20254. According to Prescient & Strategic (“P&S”) Intelligence, the HVAC market as a whole is projected to reach US$136.5 billion by 2024, registering a compound annual growth rate (“CAGR”) of 3.9% over from the past decade5. The research firm posits that global warming, and particularly greenhouse gas emissions, has led to rise in temperature across the globe, and has been a major driving force for the rising demand for HVAC systems. According to NASA’s Goddard Institute of Space Studies (“GISS”), since 1880, the average global temperature increased by 0.8⁰C per year6. Furthermore, two-thirds of the warming has occurred since 1975, at a rate of roughly 0.15-0.20°C per decade. In addition to the global rise in temperature, some countries in regions such as Middle East & Africa (“MEA”) and Asia-Pacific already experience subtropical and hot climate, resulting in intensely hot and humid summers; thereby, making them heavily dependent on HVAC systems for their cooling requirements. Water heaters and HVAC equipment are affordable due to government incentives and rebate programs (see overview of government incentives by region in 5.3.1 Global Carbon Regimes.) With manufacturers producing more energy-efficient products, consumers are now educated about heat recovery and investment in greener appliances. This represents a prime opportunity for the Company to enter the market with its HRWH that can help customers save on energy costs by capturing heat waste energy.

1.5 TARGET MARKETS Green Matters will be targeting commercial and residential facilities, operating across multiple industries in various jurisdictions around the world. Selection of the key markets will be predicated on the following criteria: PREVALENCE OF HVAC S YSTEMS, NAMELY AC UN ITS, IN WARM CLIMATES As the Company’s HRWH system is reliant on existing AC/chiller units, Green Matters will initially target warmer regions where air conditioning equipment is ubiquitous. Targeting warmer climates is also ideal due to the fact that many warmer regions have high tourism rates and thriving hospitality industries. PROGRESSIVE ENVIRONM ENTAL POLICIES AND R EGIMES Green Matters’ greatest value proposition is the considerable savings amassed by the consumer. As such, targeting jurisdictions with added financial incentives, tax credits and rebate programs will further reduce each client’s operating costs. “Water Heater Market by Type, Application, and Distribution Channel: Global Opportunity Analysis and Industry Forecast, 2018 - 2025” Allied Market Research, 2018. 5 “Heating, Ventilation, and Cooling (HVAC) Market by HVAC Type, by End-User, by Geography – Global Market Size, Share, Development, Growth and Demand Forecast, 2014–2024” P&S Intelligence, 2019. 6 “World of Change: Global Temperatures” NASA, 2019. 4

GREEN MATTERS BUSINESS PLAN

1.5.1 Opportunities Across Commercial Spaces

HOSPITALS The average hospital bed uses as much energy as several residential buildings, if the facility’s total energy consumption was divided by the number of beds. The energy-use intensity of hospitals is nearly 3x those of standard commercial buildings. Furthermore, the annual consumption of domestic hot water in BC hospitals ranged from 143 to 215 million gallons in 2018.

ARENAS Sports venues are massive consumers of energy, and more organizations are looking for innovative ways to satisfy their respective sustainability objectives. For example, the NHL, who is leading the way in sustainability efforts, reported to have consumed 1,252,000 mmBtu’s of energy in 2016, emitting 182,353 metric tons of CO2 – a mere 1% and 2% reduction from 2014, respectively.

HOTELS Energy costs can range from 5-10% of a hotel’s revenue. With Green Matters’ HRHW, larger hotel groups such as the Marriott International, Inc., who has 7,003 properties as of 2019, could see savings of over half a billion. Furthermore, for every 1,000 kWh of energy a hotel can save, approximately 1,119 pounds of CO2 emissions will be prevented.

GREEN MATTERS BUSINESS PLAN

1.6 CAPITAL REQUIREMENT The Company is currently seeking $5.0 million in financing from private investors to increase sales and marketing efforts for the HRWH. Funds from the Financing will also be devoted to leasing a larger facility to manufacture, test, and store HRWH devices. Any residual funding will be applied to general working capital purposes.

1.7 REVENUE SUMMARY To be added.

1.8 RETURN ON INVESTMENT To be added.

1.9 THE OPPORTUNITY To be added.

GREEN MATTERS BUSINESS PLAN

2 Corporate Overview Green Matters Management and Corporate Structure 2.1 CORPORATE DATA Name of Incorporation

Green Matters Technologies, Inc.

Date of Incorporation

December 2011

Address of Incorporation

67 East 5th Avenue Vancouver, BC V5T 1G7 Canada

Website

greenmattersinc.com

Legal Counsel

To be added.

Accounting

To be added.

Chief Executive Officer

Michael Caetano

2.2 EXECUTIVE MANAGEMENT The Company’s current management team has a history of entrepreneurship and extensive backgrounds in the manufacturing industries. Key personnel are highlighted below. At the current stage of development, the Company is focused on maintaining a lean corporate structure, utilizing consultants and contract workers. As the Company gains traction with sales and number of customers, Green Matters will evaluate the need for additional management, operational, and customer service staff.

GREEN MATTERS BUSINESS PLAN

Michael Caetano | Chairman & CEO Mr. Caetano has over 20 years of experience as an entrepreneur, having owned and managed multiple businesses in the Greater Toronto Area. As an entrepreneur, Mr. Caetano honed his skills in management and operational design by building several restaurants, automotive centers and real estate developments from the ground up. From 2008 to 2010, Mr. Caetano was Vice President of Operations for NorCat Financial and was accountable for brokered deals and investor fundraising for multiple private and public investment companies. His scope of management included direct investing, private placements and mergers & acquisitions. From this experience, Mr. Caetano became adept at introducing investing clients to businesses or investment companies who require funding by analyzing needs and delivering on the client’s investment objectives. Mr. Caetano also served as the President of a venture capital firm and assisted private and public companies in achieving all aspects of strategy, development and growth. This involved strategic tasks such as procurement, development and execution of investment analysis, investment fund deployment with a focus on return on investment, client relationships, and managing and fostering co-operative relationships with clients and employees. Since 2008, Mr. Caetano has taken on the role of senior executive of Skyline Custom Homes and is responsible for the operations of multiple real estate projects. Based on his business and construction knowledge, he designs, builds and implements the various stages of residential and commercial construction developments. Mr. Caetano has been devoting his efforts to Green Matters, helping the Company finance and structure the acquisition of ERS. Post-acquisition of ERS, Mr. Caetano has been heavily involved in business development and overall strategic objectives for the Company. Mr. Caetano is currently a Director and COO of public listed company Fortem Resources Inc. and has held both positions since August 2013. Mr. Caetano graduated in 1995 from Seneca College in Business with Fine Arts & Technology and also studied at the University of Toronto.

Sean Marte | Chief Technical Engineer Mr. Sean Marte is currently lead engineer at Jenmar Concepts Inc. (“Jenmar Concepts”) and has held this role since September of 2007. At Jenmar Concepts, Mr. Marte is responsible for providing product development and engineering consulting services to the compressed natural gas (“CNG”), liquefied natural gas (“LNG”), and product innovation industries. His current and past works at Jenmar Concepts include: development of a virtual pipeline model which assesses the economic viability of supplying various off grid users with CNG, LNG or natural gas; and, completing the engineering design of heat pumps for waste heat recovery up to 150 tons. Mr. Marte also designed and operated two test loops to verify the performance of the heat pumps. From 2006 – 2007, Mr. Marte held the role of design engineer at Kodak Graphic Communications where he worked with a large engineering development team to design a new material handling machine for loading printing plates automatically from pallets. Mr. Marte also helped oversee the installation, upgrades, and the completion of the pre-production machines.

GREEN MATTERS BUSINESS PLAN

From 2003 – 2006, Mr. Marte served as junior engineer at IMW Industries Ltd. where he focused on designing, building, and testing hydrogen fuelling systems. From this experience, Mr. Marte wrote test plans, operated three test stands, analyzed data, and found the root cause of failures and generated possible solutions. For the past five years, Mr. Marte has devoted significant efforts to Green Matters – researching, redesigning and improving on the HRWH. Mr. Marte’s efforts were also crucial in establishing the Company’s initial sale, having conducted initial energy audits for prospective customers and implementing the HRWH at the San Juan Marriott. Mr. Marte is adept in utilizing design and enterprise software, as well as being familiar with various programming languages and programs. Mr. Marte is a licensed P.Eng. in good standing with the Association of Professional Engineers and Geoscientists of British Columbia since July 2008. He also holds a bachelor’s degree in Applied Sciences and a Master of Engineering degree from the University of British Columbia.

Michael Waldkirch | Chief Financial Officer Mr. Waldkirch has extensive experience in providing accounting and business consultancy services to a wide variety of public and private companies, including those involved in mining, oil and gas, real estate development, high tech, and mobile banking. Mr. Waldkirch has been a partner at Michael Waldkirch & Company Inc. Chartered Professional Accountants in Vancouver, Canada since 1998. Mr. Waldkirch has represented a wide variety of public corporations including mining and high tech companies listed on the TSX-V, NYSE-MKT and OTC-BB. In addition, Mr. Waldkirch has served as Chief Financial Officer and Director of a number of Canadian and US publicly listed companies. He is adept in raising capital, having raised in excess of $200 million for public and private clients. Mr. Waldkirch holds a Bachelor of Arts degree in economics from the University of British Columbia and has been a Certified General Accountant (“CGA”) since 1998.

Marc Bruner | Director Mr. Marc Bruner has over 30 years of extensive business experience. He founded and held directorships with numerous oil and gas companies, making him a leading expert in unconventional oil and gas development in North America and internationally. Mr. Bruner was previously the Chairman and CEO of Falcon Oil & Gas Ltd. and served as Ultra Petroleum’s founding Chairman where he was involved in developing the Pinedale Anticline in Wyoming, which is now recognized as one of the largest unconventional natural gas fields in the United States. While serving these companies, Mr. Bruner oversaw negotiations and contracts with global oil and gas companies including Halliburton, Exxon Mobil, Questar Gas and Hess Corporation. Mr. Bruner recognizes the importance of green technologies and hopes to find a synergy to help make a difference in today’s oil and gas industry.

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2.3 MISSION

To be the driving force behind more efficient, green, and cost-effective solutions to energy usage and heat recovery technologies.

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2.4 CORPORATE STRUCTURE Green Matters was incorporated under the laws of the Province of British Columbia in December of 2011. The Company acquired the HRWH assets from ERS following a share-exchange. Green Matters now has effective control over the commercialization of the HRWH. Green Matters has been funded to-date through equity financing by the Company’s founders and through private placements of over $8.0 million from private investors (into predecessor ERS). The table below reflects the current share structure of the Company prior to the Financing. CURRENT SHARE STRUCT URE

Management External Shareholders

Number of Shares 32,033,089 59,490,021 91,523,110

% 35% 65% 100%

2.5 MILESTONES In late 2010, Green Matters designed a water-chilling unit, which secured Air-conditioning, Heating, and Refrigeration Institute (“AHRI”) certification for water-chilling units after demonstrating the efficiency of its compressor and heat exchanger technology. By October of 2012, the Company had shifted its focus and designed a complete new HRWH optimized for converting waste heat into valuable reusable energy. After extensive research and development, the Company completed a sale of two 150 ton HRWH’s to the Marriott Hotel in Puerto Rico in November 2014. MILESTONES ACHIEVED TO DATE

The Company has filed for patents, in both US and Canada related to various aspects of the HRWH, including: the user control interface; compressor control for heat transfer system; and, the expansion valve control. To-date, the Company has received patents for the energy exchange system and method, the user control interface, and energy transfer systems of the HRWH, along with several others. Management of Green Matters Technologies has relied heavily on existing business connections and networking with hotels, hospitality management institutions, and many others to generate sales leads. By the end of 2019, the Company projects to close a substantial amount of orders for new HRWH systems.

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2.6 FUTURE OUTLOOK The Company has identified the key short-, medium- and long-term objectives and milestones critical to achieving the Company’s vision.

Short Term Objectives The following have been identified as key milestones for the Company’s short-term success. 1. CONDUCT SALES VIS ITS Green Matters will conduct sales visits to several identified countries and cities. Management of the Company will enhance marketing and advertising strategies and materials, along with visiting applicable trade shows, conferences, and events that will present the Company to a wider audience. During these site visits, management will rely on energy-saving data analysis to educate prospective customers on the efficacy and energy-savings that the HRWH can provide. Green Matters expects to secure cumulative orders of 75 units within the first three years of operations. 2. PRODUCTION COMMENCE MENT Green Matters will confirm a number of pending orders, obtain major machine components and begin batch fabrication. Post-assembly, functional and performance tests will be conducted before the products are shipped to the end customers. 3. ENHANCE OPERATION S TEAM FOR LONG -TERM GROWTH The CEO, Chief Technical Engineer and CFO are in place. As the Company increases sales and marketing efforts and launches into full production, management of Green Matters will be reviewing and evaluating the potential for new roles and the type of individuals who would add value to the Company. Additional members to the management team will include a Vice President of Sales to dedicate to business development.

Medium Term Objectives The following factors have been identified as the key milestones for the Company’s medium-term success. 1. EXPANSION OF PROD UCT LINE In recognizing the needs of different consumer groups, the Company plans to launch an additional 75-ton HRWH. This model is significantly smaller than the Company’s existing 150-ton HRWH and will cater to smaller facilities such as office developments and unit buildings. The Green Matters engineering team will design this new model based on the existing HRWH model and identify design aspects and components that will help the Company achieve higher supplier discounts, increase the efficiency and flow-through production rate of the Company’s products and reduce order backlogs. 2. CONTINUING DEVELO PMENT ON HEAT RECOVE RY TECHNOLOGY The Company will devote efforts to continuous research and development to ensure its products remain industry leaders in the capture of waste heat energy and providing cost-saving advantages. As sales increase, management of the Company will evaluate and assess current components and software that can be further enhanced through developments from the Company’s in-house research and engineering teams.

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3. JOIN INDUSTRY GRO UPS It will be of strategic importance for the Company to join industry associations within the heat technology and cleantech industries to establish standards for quality and performance in the industry and help enhance awareness of the HRWH. Industry events, tradeshows, and consumer interest shows are critical to increase awareness of the HRWH in the market. Industry groups and events will also be an ideal venue for the Company to expand its network and establish mutually beneficial relationships. 4. IDENTIFY AND DEVE LOP ADDITIONAL STRAT EGIC BUSINESS PARTNE RS Management will review suitable marketing and business partners in order to develop long-term partnerships with a positive effect on revenues, reducing expenses, improving manufacturing processes, securing quality parts and components, and net income. More importantly, the Company aims to focus on forging relationships with existing equipment manufacturers and retailers, which the Company may utilize as sales distribution channels in the future as the product line is expanded.

Long-Term Objectives The long-term vision of the Company is focused on growth as outlined below. 1. EXPAND GEOGRAPHIC ALLY Once the Company has mass marketed the HRWH and gained traction, Green Matters plans to establish additional networks and distribution channels to broaden the Company’s brand visibility and further secure brand awareness and presence in consumer minds. Management is exploring opportunities to establish regional sales representatives, distribution networks, and retail channels globally. Many countries have existing government initiatives and incentives that encourage cleantech investment. Management will ultimately determine the best opportunities available to the Company. 2. POTENTIAL MERGERS AND ACQUISITIONS As the Company grows, it will identify suitable, existing complementary services, heat recovery technology, parts manufacturers, retail sales distributors for acquisition or equity investment. Factors for potential mergers/acquisitions include: the contribution of the acquisition target to the Company’s overall operating results; the strategic advantages of acquiring the target’s software/intellectual property/operating departments/distributor networks versus developing in-house; and, scalability of the Company’s operations when a target is acquired. 3. EVALUATE FUTURE F INANCINGS As Green Matters grows and orders increase, more capital will be required to maintain the Company’s ongoing research and development, to increase production capacity, to hire additional technical staff and showroom staff, and to recruit customer service representatives to field any customer concerns.

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3 Business Model Green Matters Technologies Verticals 3.1 BUSINESS VERTICALS To be added.

3.2 SOFTWARE AS A SERVICE (SAAS) MODEL To be added.

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GREEN MATTERS BUSINESS PLAN

4 Green Matters Product First-to-Market Heat Recovery Technology 4.1 THE HEAT RECOVERY WATER HEATER Green Matters Technologies specializes in domestic water heating equipment utilizing a proprietary heat recovery system. Heat recovery is the process of capturing thermal energy, that is otherwise released into the ambient environment as waste, and converting it into useful energy. Chillers and air conditioning systems work to remove latent heat from an area to maintain a constant dry-bulb air temperature (“DBT”) and humidity. In most systems, the heat extracted is then wasted as its temperature is too low to be used for heating. For example, a hotel continuously running a 100-ton chiller will generate 12 billion BTU’s of thermal energy each year that is then discharged into the atmosphere as waste heat. WASTE HEAT FR OM LARGE COMMERCIAL BUILDINGS

Thermal Energy

Waste Heat

Heat recovery utilizes a small amount of electrical energy to capture the thermal energy generated by the air conditioning system and upgrade it to a higher temperature.

Thermal energy that would normally be discharged and wasted can be converted to a resource.

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A conventional water-cooled water chiller system removes heat from a chilled water loop using the vaporcompression or absorption refrigeration cycle. The extracted heat is treated as waste and released into a cooling water loop. The chilled water is then circulated through a heat exchanger to cool air, while the cooling water is sent through a cooling tower. As a result of this process, thermal heat energy is extracted from the air in rooms and vented to the outdoors. The conventional chiller system refrigeration cycle is illustrated in the diagram below. Suction Line Low Pressure Vapor

Discharge Line

COMPRESSOR

EVAPORATOR

High Pressure Vapor

CONDENSER Liquid Line High Pressure Liquid

RECEIVER METERING DEVICE

4.1.1 An Alternative to Inefficient, Fossil-Fuel Based Boiler Systems Traditionally, water heaters and boilers burn fossil fuels (natural gas or oil) to generate thermal energy and deliver domestic hot water in a building. Heat recovery offers an alternative solution to satisfy hot water loads when thermal energy is available. Conventional fired water heaters and boilers have a maximum efficiency (the percentage of energy converted to heat) of 95%. Typical legacy equipment may have a rated efficiency of 80-90%, as some heat is always lost to the flue gases, but older systems may only be 60-80% efficient in actual use due to age and improper maintenance. Heat recovery equipment, by contrast, upgrades existing thermal energy to a higher temperature. The amount of thermal energy moved can be many times larger than the amount of electrical energy used to drive the system.

The effective efficiency can be as high as 550-650%, resulting in a dramatic reduction in energy costs . Green Matters has developed a heat recovery solution that (i) recovers the waste heat discharged from chillers and air conditioning systems and upgrades the thermal energy to a higher temperature without the burning of fossil fuels and (ii) is seamlessly integrated into existing systems. An additional value-add of Green Matters’ heat recovery system is that while it introduces an environmentally-sustainable alternative to heating water, it does not require complex retrofitting endeavors or the complete removal of existing boilers. A residential or commercial building, be it a hotel, hospital or recreational facility, may choose to keep their boilers dormant to act as a back-up system.

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Moreover, in the rare case of a system failure, the compressor can be changed while the HRWH is still working. For redundancy purposes, if both compressors fail, the existing boiler will automatically be activated. Green Matters’ HRWH is also a smart system, in that it is designed to be monitored and controlled remotely. Parameters can be changed on demand from anywhere in the world. Moreover, the HRWH is designed to generate efficiency and savings data, as well as specific performance indicators, in real-time. For instance, a property owner can access current gas prices and the HRWH’s savings at any time from any location.

4.2 THE TECHNOLOGY The technology utilized in the HRWH represents a breakthrough in the HVAC industry. The integrated heating and cooling design architecture enabled by the system allows the heating function to be provided as a by-product from the existing cooling equipment. Green Matters has also received patents for the piping design and control algorithms of the HRWH, and is currently awaiting additional patents to be approved (see: 4.2.1 Patents.) As can be seen in the diagram of the Company’s HRWH below, a portion of the water chillers’ cooling loop is fed through to the evaporator component of the HRWH, and the waste heat is drawn from this water source. A similar vapor-compression refrigeration cycle is used to move this heat into the hot water loop of a building. The compressors are electrically driven, and this input energy also ends up in the hot water. Hot water generated from Green Matters’ equipment can be heated to a maximum temperature of 150 degrees Fahrenheit. GREEN MATTERS HRWH S YSTEM SCHEMATIC HEATING LOAD

Space Heating Water Load or Domestic Hot Water

HEAT REMOVED

HOT WATER

CITY SUPPLY ROOFTOP COOLING TOWER

COOLING WATER

HRWH

EVAPORATOR WATER CHILLER #1 CHILLING WATER WATER LINE REFRIGERANT LINE

COOLING LOAD Air Conditioning or Dehumidification

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A significant advantage to the HRWH is the use of a doubled-walled heat exchanger on the condenser. While this degrades heat transfer efficiency, it allows potable water to be heated directly without the requirement of a secondary heating loop.

4.2.1 Patents GREEN MATTERS PATENT LIST (UPDATED MAY 24 , 2019) Patent

Country

Issue Date

Status

Retro-fit energy exchange system for transparent incorporation into a plurality of existing energy transfer systems

Canada

17-10-2017

Issued

Retro-fit energy exchange system for transparent incorporation into a plurality of existing energy transfer systems

Canada

29-11-2016

Issued

Energy exchange system and method

USA

28-04-2015

Issued

User control interface for heat transfer system

USA

12-01-2016

Issued

Retro-fit energy exchange system for transparent incorporation into a plurality of existing energy transfer systems

USA

17-05-2016

Issued

Retro-fit energy exchange system for transparent incorporation into a plurality of existing energy transfer systems

USA

22-11-2016

Issued

Energy exchange system and method

USA

11-04-2017

Issued

Retro-fit hot water system and method

USA

16-04-2019

Issued

Retro-fit hot water system and method

Canada

Pending

User control interface for heat transfer system

Canada

Pending

4.3 THE APPLICATIONS Green Matters’ current HRWH model is a 150-ton model that is suitable for large facilities such as hotels, hospitals, commercial/residential high-rise buildings and community sports facilities. The design of the HWRH is scalable to allow a wide range of uses and custom installation allows for a fit that is suitable for new facilities and those with existing water-cooled water chillers. The HRWH has a minimal footprint with a compact design and piping layout, making it ideal to be retrofitted into existing mechanical rooms with limited space. Moreover, the HRWH has a rated full load efficiency or coefficient of performance (COP) of 550 to 650%, meaning the HRWH is highly efficient and operating costs are low. Green Matters expects this COP ratio to increase following minor adjustments to the existing model.

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For Green Matters’ first phase of operations and production, the Company will sell the HRWH at a retail price of USD$400,000. The Company will assist customers with installation following the initial purchase of the system and, if necessary, will outsource repairs and maintenance staff to assist with on-site installation. Additional training, maintenance and services will be available from the Company’s customer service staff. Green Matters will also offer maintenance and service package subscriptions on a monthly basis.

4.3.1 Proof of Concept The Company’s sale of its first two 150-ton HRWHs to the Marriott hotel in San Juan, Puerto Rico is a prime case study and testimonial to the efficiency and effectiveness of the HRWH (see: Appendix 10.1: Marriott Resort Testimonial Letter.) Data generated from this HRWH installation indicates a 65% to 75% savings on the hotel’s water heating bill. These savings will be representative for most installations in Puerto Rico. Furthermore, during Green Matters’ initial operating tests for the first installation at the Marriott hotel, the HRWH unit was able to output 1,490 MBTU/hr heating load and achieved a COPh of 5.5. Measured performance during and after installation showed the HRWH operating as expected under actual conditions.

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Michael Caetano overseeing the HRWH installation at the Marriott Resort Hotel in San Juan, Puerto Rico.

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4.4 THE ADVANTAGES Reduction in Energy Costs The initial operating performance of two HRWH’s at the Marriott hotel, a 525-room facility, have resulted in 65-75% reduction in energy costs, or US$10,000 to US$20,000 per month. For a full-service hotel, energy costs are usually between 4-6% of revenue, with luxury resorts’ energy costs exceeding 10%7. According to the U.S. Energy Information Administration (“EIA”), U.S. hotels spend an average of US$2,196 on energy costs per each available room8. To illustrate an example, Hampton by Hilton, a mid-scale brand of Hilton Worldwide Holdings Inc. (NYSE: HLT), reported a 69.8% occupancy in its 250,310 rooms in 20189. If the EIA’s estimate were to be applied, the Hilton would have allocated $383,502,454 in energy costs for the Waldorf Astoria hotel alone. Considering water heating accounts for 31% of a hotel or lodging facility’s energy consumption10, the hotel would therefor allocate $118,885,761 for that purpose. CASE STUDY: HAMPTON BY HILTON HOTEL

If Hampton by Hilton were to implement Green Matters’ HRWH in each of its 2,433 properties, the hotel brand could save $83,220,033 in energy costs (designated for heating water) a year, or $6,935,003 a month. Furthermore, Hampton by Hilton is only one of 14 Hilton’s hotel brands. The accumulated savings across all 14 brands (totalling 912,960 rooms) could dramatically reduce energy costs for the hotel group, directly impacting the company’s bottom line.

Pinnacle Advisory, 2019. U.S. Energy Information Administration, 2018. 9 “Press Release: Hilton Reports Fourth Quarter and Full Year Results; Exceeds Net Income, Adjusted EBITDA and Net Unit Growth Expectations” Hilton Worldwide Holdings Inc., 2019. 10 U.S. Energy Information Administration, 2016. 7 8

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Environmental Sustainability The initial operating performance of two HRWH’s at the Marriott hotel have resulted in an 84-88% reduction in energy usage and 54-66% reduction in fuel consumption. Furthermore, with the implementation of Green Matters’ HRWH, the Marriott hotel saves 300 tons of CO2 every quarter – the equivalent of taking 20 cars off the road. As of March 2019, Marriott International, Inc. (NASDAQ: MAR) has 7,003 properties across 110 countries11. If each property were to adapt 2 150-ton HRWHs, the hotel group could theoretically save 8,403,600 tons of CO2 a year* – the equivalent of taking over half a million cars off the road. Furthermore, the U.S. Environmental Protection Agency (EPA) released an updated Emission Factors for Greenhouse Gas Inventories database in 201812, citing CO2 (carbon dioxide), CH4 (methane) and N2O (nitrous oxide) factors for steam and heat, among other fuel consumption categories: EMISSION FACTORS FOR GREENHOUSE GAS INVENTOR IES: STEAM AND HEAT CO2 Factor kg / mmBtu 66.33

Steam and Heat

CH4 Factor g / mmBtu 1.250

N2O g / mmBtu 0.125

Note: Emission factors are per mmBtu of steam or heat purchased. These factors assume natural gas fuel is used to generate steam or heat at 80 percent thermal efficiency.

To illustrate an example, it is estimated by Newfoundland Power that a family of four consumes about 2856 gallons of hot water per day13, or 196-392 gallons per week. Utilizing the conservative estimate, the heat energy required to heat 196 gallons of water (from 55°F to 120°F) would be 106,340 BTUs per week, or 5,529,680 BTUs each year. Applying the EPA’s emission factors to this data, the average family of four that uses natural gas water heating systems is responsible for 367 kg of CO2, 7 kg of CH4 and 1 kg of N2O emissions per year. When considering the number of households in Canada, and the percentage of households that utilize natural gas for water heating, the national figures amount to 3,705,462 tons of CO2, 69,830 tons of CH4 and 6,983 tons of N2O each year. Annual Energy Consumption for Heating Water in Canadian Homes Average Household Energy Consumption per Year

5.5296 mmBtu

Households in Canada

14,099,86014

% of Households Utilizing Natural Gas for Water Heating

65%15

# of Households Utilizing Natural Gas for Water Heating

9,164,909

Annual Energy Consumption per Year

50,679,014 mmBtu Annual CO2 Emissions

3,705,462 tons

Annual CH4 Emissions

69,830 tons

Annual N2O Emissions

6,983 tons

“Marriot International, Inc. Quarterly Report” U.S. Securities and Exchange Commission, 2019. “Emission Factors for Greenhouse Gas Inventories” U.S. Environmental Protection Agency, 2018. 13 “Home Comfort: Water Heating” Newfoundland Power, 2018. 14 “Population, Dwellings and Households” Canada 2016 Census, 2016. 15 “North American Natural Gas Market: 2015-2016 Heating Season Outlook” Natural Resources Canada, 2017. 11 12

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* This scenario assumes all Marriott hotels have the same size property as the San Juan location, with the same number of rooms and occupancy rates. The scenario is intended to illustrate an example and is not intended to be used as a projection.

These are the estimates using conservative figures for natural gas boilers in Canadian homes alone. Commercial buildings such as hospitals, hotels and industrial facilities require considerably more energy to supply domestic hot water, and so it can be expected that their annual emissions as a whole are significantly greater. In an effort to provide a solution to global annual emissions, Green Matters aims to bring a viable and much more sustainable option to market with its proprietary HRWH system. Ease of Implementation There are a number of HVAC companies that currently utilize heat recovery technology, but all such models have considerable limitations. These include: ▪ ▪ ▪ ▪ ▪

Their heat recovery equipment is only compatible with their own HVAC equipment; Their existing models of heat recovery equipment operate within a relatively narrow band of temperatures and require the assistance of a boiler to achieve wider range temperatures; The maximum temperature that can be imparted to receiving water is 140°F (not feasible for healthcare facilities and commercial buildings with similar requirements); The equipment cannot be easily retrofitted; Overall COP (coefficient of performance) is much lower.

Green Matters’ HRWH is designed to be seamlessly integrated with any existing air conditioning or chiller unit. Furthermore, it can be easily retrofitted into any facility (as of May 2019, the Company has completed its second generation machine that is suitable for small offices and residential dwellings) and does not require the removal or replacement of a boiler. A residential or commercial building, be it a hotel, hospital or recreational facility, have the option to keep their boilers dormant to act as a back-up system. Moreover, in the rare case of a system failure, the compressor can be changed while the HRWH is still working. For redundancy purposes, if both compressors fail, the existing boiler will automatically be activated.

4.5 OPERATIONS 4.5.1 OEM Components Green Matters’ Chief Technical Engineer has been researching and refining the HRWH since 2011, and its components as the current model is the foundation for the Company’s future expanded product line, which includes a smaller model ideal for commercial buildings such as offices, and a micro model that can be used for residential homes. By having an existing proven and effective HRWH model to build on, all appliances in the Green Matters Technologies product line will benefit from more efficient manufacturing, production, assembly time, and customer wait time can be greatly reduced. Green Matters’ current HRWH system utilizes OEM components from various suppliers, including: Siemens, Bitzer compressors, Kelvion evaporators and Tigon Systems.

4.5.2 Warehouse Facility and Future Expansion Green Matters’ 10,000 ft.2 development and manufacturing facility is located in Richmond, British Columbia and is capable of producing several HRWHs per month. The Company is currently evaluating several options to expand its facilities around the world, which will allow Green Matters to quickly dispatch its products and reduce shipping time to customers. Future assembly plants will be established globally upon financing and committed sales. Green Matters is considering its second facility to be constructed in Puerto Rico to cater to the Caribbean Islands. The Company’s target market includes jurisdictions with warmer climates, where air conditioning systems are more prevalent.

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5 Market and Industry Analysis Global Sustainability & Energy Efficiency 5.1 THE RISE OF GREEN BUILDING ACTIVITIES Due to rising energy costs and increasing environmental concerns, there has been a significant trend in green building investment and architecture. Green buildings focus on resource efficiency, lower operating costs, and higher building performance. Buildings with energy-efficient equipment tend to have increased sales values due to lower operating margins and higher cap rates.

LEVEL OF GREEN BUILD ING ACTIVITY PROJECTED I N 2021 Dodge Data & Analytics, 2018

According to the World Green Building Trends 2018 Report produced by Dodge Data & Analytics, green building growth is mainly driven by: (i) client demand; (ii) environmental regulations; and, (iii) market demand. The report notes the significant value in green investments, citing that since 2012, there has been a steady growth in the number of owners who see a 10% or greater increase in asset value for new, green buildings compared to traditional ones.16 Furthermore, global respondents (from 20 countries across 5 continents) were asked about their current and future plans for green building projects, with almost half of all respondents (47%) indicating that the majority of their projects will be green by 2021. Initiatives from various governments have reflected this upward trend. As an example, in June 2019, NY’s Governor Cuomo announced that $15 million would be made available to eligible building owners specifically for green building initiatives.17 “World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018. “International Paper and Recycled Energy Development Committing to Significantly Reduce Carbon Emissions from Large-Scale Buildings” NYSERDA, 2019. 16 17

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Many companies already make investments to improve the operating efficiency and performance of their buildings. As an example, in 2016, Extended Stay America, a hotel chain with 629 hotels across US and Canada, made a US$1 billion investment18 to improve the lighting at all of its 629 locations. This investment was intended to improve existing outdoor lighting, which had been over 20 years old, and to reduce maintenance costs. An estimated 18.5 million kWh were expected to be saved per year, which translates into annual savings of US$1.75 million. Combined with other reduced expenses, this transition translates to over US$3 million in annual savings for the hotel. The investment also benefits the environment, leading to a CO2 reduction of 10,216 metric tons. This example illustrates that investments in green buildings and equipment will lead to cost saving while benefiting the environment. Green Matters is excited at the prospect of more companies and establishments investing in energysaving initiatives. Furthermore, if Extended Stay America were to have invested that same US$1 billion in Green Matters’ HRWH system, the hotel would be equipped with 2,100 150-ton machines that provide monthly energy cost savings of $10,000-$20,000 – resulting in over US$300 million in energy savings per year.

Additionally, such an investment using the Green Matters’ HRWH would also benefit the environment with more than 70 times less carbon dioxi de emissions produced. 5.1.1 Green Building Activities by Region Dodge Data & Analytics’ report further indicates that emerging economies such as Brazil, China, Colombia and India will experience tremendous growth in green buildings and architecture. In particular, the percentage of green building developments in Brazil is expected to grow from 21% in 2018 to 42% by 202119. Similarly, Colombia’s green building developments are expected to grow from 19% in 2018 to 46% in 2021. As both these countries have hot climates, they are ideal markets for the Green Matters’ HRWH. FIGURE 1: % OF FIRMS THAT ARE DOING MORE THAN 60% OF GREEN PROJECTS 2018 and Projections for 2021 2018

2021

66%

64%

61%

55%

46%

34%

30%

UAE

AUSTRALIA

48% 35%

CANADA

48%

29%

NORWAY

42%

47%

28%

SOUTH AFRICA

28%

SPAIN

34%

IRELAND

45%

COLOMBIA

SINGAPORE

MEXICO

45% 32%

19%

HONG KONG

54% 27%

INDIA

46%

54% 40%

USA

42% 21%

BRAZIL

Source: Dodge Data & Analytics/United Technologies 18 19

“Extended Stay America invests in lighting upgrades” Proud Green Building, 2016. “World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018.

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Dodge Data & Analytics’ study was conducted by surveying 2,000 participants from 87 countries across five continents. This included 19 countries with a large enough response to support statistically significant analyses of the findings. Some key findings and insight are presented below: AUSTRALIA According to Dodge Data & Analytics’ Green Building report, Australia has one of the highest shares of Green Building Council (“GBC”) respondents at 63% (behind the UAE who had 66%), and the highest percentage of participants who reported doing the majority (over 60%) of their projects green20. As illustrated in Figure 1, steep growth is also projected to 2021. The report posits that market drivers include client/market demand for green initiatives, and that improving occupant health and well-being is the primary social reason for building green. Furthermore, Australia has a wide variety of climates due to its large geographical size, with the largest part of Australia is desert or semi-arid. Climate change in Australia is a highly contentious political issue21. Temperatures in the country rose by approximately 0.7 °C between 1910 and 2004 22, following an increasing trend of global warming. Overnight minimum temperatures have warmed more rapidly than daytime maximum temperatures in recent years. As such, it can be expected that air conditioning and chiller units are more prevalent in Australia than other cooler countries and regions. Along with the nation’s forward-thinking green building activity emergence, Australia becomes a key target for Green Matters. BRAZIL A moderate percentage in Brazil (21%) did the majority of their green building projects in 2018, but twice as many (42%) are expected to do that share of green in 2021. A variety of factors drive the green building market forward, including market transformation and subsequent demands, as well as energy conservation and protecting natural resources. Brazil is also one of the key target markets for Green Matters due to its hot climate. The climate in Brazil varies considerably mostly from tropical north (the equator traverses the mouth of the Amazon) to temperate zones south of the Tropic of Capricorn. Temperatures below the equator are high, averaging above 25 °C, but the temperate zones see summer extremes of up to 40 °C. Rio de Janeiro, Recife, and Salvador on the coast have warm climates, with average temperatures of each month ranging from 23 - 27 °C, while the cities of São Paulo, Curitiba, and Porto Alegre have a subtropical climate similar to that of southern United States23. CANADA Over one third in Canada did the majority of their projects green in 2018, and a moderate growth is expected into the future. Client demand is reported to be the primary market driver in the nation, selected by a much higher percentage (50%) than the global average (34%)24. Canada also has a considerable variety of federal and provincial financial/tax incentive programs to promote green building activities (see 5.4.2. Sustainability Incentives in Canada for a detailed list.)

“World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018. “Scientists Trace Extreme Heat in Australia to Climate Change” The New York Times, 2014. 22 “CSIRO report says Australia getting hotter with more to come” ABC, 2014. 23 Gobrazil.net, 2019. 24 “World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018. 20 21

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CHINA China (Hong Kong) had the second highest percentage of those doing the majority of their projects green in 2018 (46%)25, and a relatively high share of respondents who were GBC members. Client demands and regulations are the top drivers for the market moving forward. The Chinese climate varies from region to region, with hot and dry summers in the northeast, and semitropical conditions, coupled with rainfall, in the central regions. While China may not necessarily be the warmest climate within this list, the nation does have the highest demand for air conditioning units in the world, accounting for 41.6% of the total world demand, with 46 million units in 2016.26 COLOMBIA While the percentage of participants doing the majority of their projects green was relatively low in 2018, nearly half (46%) expected to do over 60% green projects in 2021. This is in line with the country’s aggressive plans and policies in place to support environmental restoration27. Internal commitments is one the main market drivers in Colombia, and demonstrates the importance of private industries promoting green in the country. Another market driver is lower operating costs, which reflects the importance of bottom-line business benefits (supported by financial incentives and programs specific to sustainability/alternative energy projects.) The climate of Colombia is characterized for being tropical as a result of its geographical location near the equator, presenting variations within five natural regions and depending on the altitude, temperature, humidity, winds and rainfall. INDIA The percentage of respondents doing the majority of their projects green in India is expected to nearly double by 2021, from 28% to 55%28. The green building initiative is driven by environmental regulations, and the nation is doing more to raise public awareness on the matter. India hosts six major climatic subtypes, ranging from arid desert in the west, alpine tundra and glaciers in the north, and humid tropical regions supporting rainforests in the southwest and the island territories. Many regions have starkly different microclimates. The country often witnesses extremes in temperatures, with the highest temperature ever recorded in India reaching 51°C in 201629 (Jodhpur District, Rajasthan.) India has quickly become one of the leaders in its green building initiatives and activities. The Indian Green Building Council (“IGBC”) was formed by the Confederation of Indian Industry (“CII”) in 2001. The council is based out of the CII Green Business Centre, Hyderabad, which is India’s 1st Platinum-rated green building. IGBC is the country's premier body for green building certification and allied services. To date, the council has achieved the following milestones: •

5,320+ projects registered with IGBC30 from various parts of India and abroad, amounting to a total footprint of 6.86 billion ft.2;

“World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018. “World Air Conditioner Demand by Region.” The Japan Refrigeration and Air Conditioning Industry Association, 2018. 27 “The KPMG Green Tax Index.” KPMG International Cooperative, 2017. 28 “World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018. 29 “India Just Set A New All-Time Record High Temperature - 51 Degrees Celsius.” NDTV, 2016. 30 Indian Green Building Council, 2019. 25 26

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• • •

25 IGBC green building ratings to cover all typologies of projects, including: residential, commercial, industrial, and healthcare; 1,810+ IGBC member organizations comprising of developers, architects and consultants; 3,730+ qualified IGBC Accredited Green Building Professionals, and more than 30,000 stakeholders that have been trained by IGBC to date.

To date, more than 1,250 projects (approximately 400 million ft.2) have been rated by IGBC. These IGBCrated projects, compared to conventional structures, have demonstrated significant savings to the extent of up to: • • • •

15,000 MWh of energy per million ft.2 per annum; 45,000 KL of water per million ft.2 per annum; Installation of 100 MW of renewable energy in IGBC certified projects; Reduced CO2 emissions by 12,000 tons per million ft.2 per annum.

India, with its warm climate and aggressive implementation of green building initiatives, presents an exceptional opportunity for Green Matters with its HRWH technology. In addition to existing policies and tax credit regimes, India also offers programs specific to energy-efficiency and water treatment (see 5.4.1 Global Carbon Regimes for more details.) MEXICO In 2018, slightly more than a quarter in Mexico (27%) did a majority of their projects green, but that percentage is expected to double in 202131. Mexican respondents regarded a wide range of drivers as influential, including environmental regulations, market transformation and lower operating costs. The climate in Mexico varies according to its topography. Along the coast, it is hot and humid, unbearably so in the summer. Inland communities at higher elevations such as Guadalajara (5,200 ft. above sea level) are much dryer and more temperate. Mexico’s hot climate is one of the reasons the country is a popular tourist destination, with 39.3 million tourist arrivals in 201732. The nation has seen a steady upward trend in tourist arrivals since 201033 (see: Figure 2), indicating increasing activity and development in the hospitality sector. This serves as an ideal market for Green Matters, who will be targeting hotels specifically in warmer regions. FIGURE 2: MEXICO TOURIST ARRIV ALS

Source: Trading Economics. “World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018. “UNWTO Tourism Highlights 2018 Edition.” UNWTO World Tourism Organization, 2018. 33 “Mexico Tourist Arrivals.” Trading Economics, 2019. 31 32

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UNITED STATES Despite the United States’ withdrawal from the 2015 Paris Agreement34 (the collective pledge among 196 countries to satisfy the long-term goal of significantly reducing global GHG emissions), the nation’s green building activity will rise to 2021, with 45% of respondents doing mostly green projects35. The United States, while limited in federal environmental programs under the Trump Administration, has a considerable amount of state-level financial incentives and policies in place (see: Figure 3.) For example, the US has 40 federal programs available for corporations seeking sustainability credits, while the state of California alone has over 217 programs36, including a 30% tax credit for renewable energy investments37. FIGURE 3: POLICIES A ND INCENTIVES BY STA TE

Source: NC Clean Energy Technology Center.

5.2 GLOBAL HVAC MARKETS According to ReportLinker, the global water heater market was valued at US$32.6 billion in 2017 and is projected to reach US$48.5 billion by 202538, growing at a CAGR of 5.1% over the 8 year period. The report attributes consumer inclination toward the adoption of energy-efficient systems and favourable government subsidies encouraging the use/transition to alternative-energy water heaters as key market drivers. “The Indoor Man in the White House” The Atlantic, 2019. “World Green Building Trends 2018 Report” Dodge Data & Analytics/United Technologies, 2018. 36 “Database of State Incentives for Renewables & Efficiency.” NC Clean Energy Technology Center, 2019. 37 “The Ultimate 2019 Guide for California Solar Tax Credits and Incentives.” Solar Tech, 2019. 38 “Water Heater Market by Type, Application, and Distribution Channel: Global Opportunity Analysis and Industry Forecast, 2018 2025.” ReportLinker, 2019. 34 35

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New technology is being developed for water heaters to become increasingly energy-efficient. Many countries offer government incentives and rebate programs to encourage manufacturers to develop innovative technology and to promote more energy-efficient appliances for retail and commercial users. Furthermore, the rise in number of hospitals and hotels, and increase in population and improved infrastructure in rural areas is anticipated to fuel the growth of the global water heater market. Within the HVAC market, P&S Intelligence asserts that the market as a whole is projected to reach US$136.5 billion by 2024, registering a CAGR of 3.9% over from the past decade39. The research firm posits that global warming, and particularly greenhouse gas emissions, has led to rise in temperature across the globe, and has been a major driving force for the rising demand for HVAC systems. According to NASA’s Goddard Institute of Space Studies, since 1880, the average global temperature increased by 0.8⁰C per year40. Furthermore, two-thirds of the warming has occurred since 1975, at a rate of roughly 0.15-0.20°C per decade. In addition to the global rise in temperature, some countries in regions such as Middle East & Africa and Asia-Pacific already experience subtropical and hot climate, resulting in intensely hot and humid summers; thereby, making them heavily dependent on HVAC systems for their cooling requirements. Growth in the HVAC industry is also evident in survey responses from industry participants. In a survey conducted by Air-Conditioning, Heating Refrigerating Exposition (“AHR Expo”), ASHRAE Journal, and International Exposition Co., HVAC industry participants were asked about the optimism of the industry for the coming year. Of those that were surveyed, 87% of exhibitors felt confident about their business prospects going into 201941, with 44% of respondents reporting a significant sales increase of over 10% year-on-year. In terms of product innovation and development, 64% of manufacturers indicated plans for introducing new products in 2019. In terms of various segments that the HVAC manufacturers are targeting, lodging had been forecasted to experience the fastest growth. As HVAC equipment accounts for 39% of energy used in US commercial buildings42, this market represents a significant opportunity for Green Matters.

5.2.1 Valuation Analysis Investment in clean technology has increased dramatically over the past several years. Clean technology entails renewable energy such as wind, solar, and other technology that reduces pollution and contributes to more efficient production/less consumption of resources. According to S&P Global Market Intelligence, clean energy investment in the US market hit a record US$64.2 billion in 201843. Ultimately, there is sufficient investment and room for growth in the clean tech, water heating, and HVAC marketplace. The advantages of Green Matters and its proprietary HRWH system lie in its superior waste heat capture capabilities, which will reduce energy costs for customers.

“Heating, Ventilation, and Cooling (HVAC) Market by HVAC Type, by End-User, by Geography – Global Market Size, Share, Development, Growth and Demand Forecast, 2014–2024” P&S Intelligence, 2019. 40 “World of Change: Global Temperatures” NASA, 2019. 41 “HVACR Manufacturers Report Sales Growth, Forecast Indicates Confidence Heading into 2019.” AHR Expo, 2019. 42 “High-Performance HVAC.” Viridian Energy & Environmental, Inc., 2016. 43 “Report says U.S. clean energy investment hit record $64.2 billion in 2018.” Institute for Energy Economics and Financial Analysis, 2019. 39

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Clean energy investment in the US market hit a record US$64.2 billion in 2018.

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As outlined in the table and graph below, there are a number of companies involved in the water heating and HVAC industries whose shares trade on either the New York Stock Exchange (“NYSE”), or the National Association of Securities Dealers Automated quotations (“NASDAQ”). Many of the companies operating in the HVAC industry are mature in terms of development. The average enterprise value (“EV”) to earnings before interest, taxes, depreciation and amortization (“EBITDA”) multiple for these companies is 11.01. FIGURE 4: INDUSTRY VALUATIONS Market Cap

Enterprise Value (EV)

TTM Revenues

TTM EBITDA

TTM Net Income

A.O. Smith Corporation (NYSE:AOS) Watsco Inc. (NYSE:WSO) United Rentals, Inc. (NYSE: URI)

$5,704.9 $3,976.0 $5,598.3

$5,308.7 $4,432.5 $13,581.3

$2,540.0 $4,110.0 $5,820.0

$462.1 $355.7 $1,800.0

$282.9 $172.9 $585.0

Modine Manufacturing Company (NYSE: MOD)

$527.8

$603.9

$1,370.0

$102.0

($12.3)

Watts Water Technologies, Inc. (NYSE: WTS) Mueller Industries, Inc. (NYSE: MLI) Continental Materials Corporation (NYSE: CUO)

$1,533.2 $1,682.2 $19.4

$1,814.3 $1,655.8 $25.1

$1,470.0 $2,100.0 $135.0

$114.3 $161.8 $3.2

($112.9) $87.9 ($0.1)

EnviroStar, Inc. (NYSE: EVI)

$22.8

$18.3

$29.6

$2.1

$1.3

Graham Corporation (NYSE: GHM) AAON, Inc. (NASDAQ: AAON) Lennox International Inc. (NYSE: LII)

$195.3 $1,485.4 $6,043.0

$123.1 $1,477.5 $6,748.4

$105.2 $358.6 $3,470.0

$16.4 $83.4 $429.2

$9.8 $45.7 $187.2

Company In Million USD$

EV / Revenues

EV / EBITDA

EV / Net Income

A.O. Smith Corporation (NYSE:AOS) Watsco Inc. (NYSE:WSO) United Rentals, Inc. (NYSE: URI)

2.1 1.1 2.3

11.5 12.5 7.5

18.8 25.6 23.2

Modine Manufacturing Company (NYSE: MOD)

0.4

5.9

N/A

Watts Water Technologies, Inc. (NYSE: WTS) Mueller Industries, Inc. (NYSE: MLI) Continental Materials Corporation (NYSE: CUO)

1.2 0.8 0.2

15.9 10.2 7.9

N/A 18.8 N/A

EnviroStar, Inc. (NYSE: EVI)

0.6

8.8

14.5

Graham Corporation (NYSE: GHM) AAON, Inc. (NASDAQ: AAON) Lennox International Inc. (NYSE: LII)

1.2 4.1 1.9 1.38 1.12 0.80

7.5 17.7 15.7 11.01 10.23 0.36

12.6 32.3 36.0 22.74 21.03 0.36

(Continued) In Million USD$

Average Median Coefficient of Variance

Companies operating in the HVAC industry trade on average at an EBITDA multiple of 11.01x.

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5.3 INVESTMENT IN RENEWABLE ENERGY AND SMART ENERGY TECH According to authoritative figures from research company BloombergNEF (“BNEF”), global clean energy investments totaled US$332.1 billion in 201844. The reports states that 2018 was the fifth year in a row in which investment exceeded the US$300 billion mark. The reports goes on to state that there were sharp contrasts between clean energy sectors in terms of the change in dollar investment in the year prior: Wind investment rose 3% to US$128.6 billion, with offshore wind having its second-highest year. Capital committed to smart meter rollouts and electric vehicle company financings also increased. Global venture capital and private equity investment increased by 127% to US$9.2 billion, the highest since 2010. FIGURE 5: GLOBAL NEW INVESTMEN TS IN CLEAN ENERGY

Source: Bloomberg

Analyzing the 2018 clean energy investment numbers by country, China was the leader once more, but its total of US$100.1 billion was down 32% on 2017’s record figure due to the country’s plunge in the value of solar commitments. Jon Moore, chief executive of BNEF, commented: “Once again, the actions of China are playing a major role in the dynamics of the energy transition, helping to drive down solar costs, grow the offshore wind and EV markets and lift venture capital and private equity investment.” As for the rest of the world, the United States was the second biggest investing country, at US$64.2 billion. Developers have been rushing to finance wind and solar projects in order to take advantage of tax credit incentives set forth by the Obama Administration, before they expire early next decade (under ratifications made by the Trump Administration.)

“Clean Energy Investment Exceeded $300 Billion Once Again in 2018.” BloombergNEF, 2019.

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FIGURE 6: COUNTRIES AND TERRIT ORIES INVESTING IN E XCESS OF $2 BILLION IN CLEAN ENERGY IN 2 018 (IN BILLION US D$) Japan India Germany The UK Australia

Increased 7-fold Increased by 60% Increased by 37%

Spain Netherlands Sweden France South Korea South Africa

Increased 40-fold

Mexico Vietnam Denmark Belgium Morocco Italy Ukraine Taiwan

Increased 18-fold Increased 5-fold Increased 4-fold Increased 13-fold Increased by 11% Increased 15-fold Increased by 134%

Turkey Canada Norway

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

Clean Energy Investment in Billion USD$ Source: BloombergNEF.

5.4 GLOBAL SUSTAINABILITY Since the Industrial Revolution, energy-driven consumption of fossil fuels has led to a rapid increase in CO2 emissions, disrupting the global carbon cycle and leading to a planetary warming impact. Global warming and a changing climate have a range of potential ecological, physical and health impacts, including (i) extreme weather events (e.g. floods, droughts, storms, and heatwaves), (ii) sea-level rise, (iii) altered crop growth, and (iv) disrupted water systems. Most of the world’s greenhouse gas emissions come from a relatively small number of countries. China, the United States, and the nations that make up the European Union are the three largest emitters on an absolute basis. In 2017, China’s total emissions amounted to 9,839 million metric tons of CO2 equivalent45, whereas different sources report the United States as being responsible for 5,27046 to 6,45747 million metric tons of CO2 equivalent. Per capita greenhouse gas emissions are highest in the United States and Russia.

U.S. Environmental Protection Agency, 2018. Global Carbon Atlas, 2018. 47 U.S. Environmental Protection Agency, 2018. 45 46

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In the past decade, about half of all global emissions were the result of electricity and heat production48. Transportation and manufacturing industries both contributed approximately 20%, residential, commercial and public services approximately 9%, and other sectors contributing 1 to 2%. FIGURE 7: CARBON DIOX IDE EMISSIONS BY SEC TOR OR SOURCE Share of carbon dioxide emissions form fuel combustion 100% 80% 60% 40% 20% 0%

Transport

Electricity and Heat Production

Manufacturing

Other Sectors

Residential & Commercial Buildings

Source: International Energy Agency (IEA) via The World Bank

Global GHG emissions have been an increasingly-dire problem that many nations have pledged to address. The first legally binding, universal agreement to address climate change was signed by representatives from 196 countries at the 21st session of the Conference of the Parties (“COP21”) of the UN Framework Convention on Climate Change (“UNFCC”) in Paris on December 12, 201549. The Agreement specifically defined the long-term goal to hold the increase in global average temperature to well below 2°C above pre-industrial levels and pursue efforts to limit the temperature increase to 1.5°C.

70%

25%

60%

20%

50% 40%

15%

30%

10%

20%

10% 0%

China

India

Brazil

Russia

Japan

Canada

Congo

Indonesia Australia

South Korea

Mexico

Share of 2012 GHG

Domestic Reduction in GHG by 2030

FIGURE 8: GHG REDUCTION TARGETS TO 2030 P LEDGED BY SELECT COUNTRIES a

a Countries listed with share of 2012 GHG emissions exceeding 1.25%; USA (with a 12.10% share of 2012 GHG

emissions50), under the Trump Administration, withdrew from the Paris Agreement51. Source: Carbon Brief Ltd., Climate Action Tracker “CO2 emissions by sector.” Our World in Data, 2019. “Historic Paris Agreement on Climate Change: 195 Nations Set Path to Keep Temperature Rise Well Below 2 Degrees Celsius.” United Nations, 2015. 50 “Paris 2015: Tracking country climate pledges” Carbon Brief, 2015. 51 “The Indoor Man in the White House” The Atlantic, 2019. 48 49

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5.4.1 Global Carbon Regimes In an effort to meet their respective targets, different nations have been implementing federal policies and regimes to promote de-carbonization across all industries. From the European Union to the United States to China, environmental taxes, sustainability incentives and carbon regimes continue to develop and increase in importance. In Japan alone, environmental tax revenues reached US$93 billion in 201652, a 40% increase from 2006. Over the same period, revenues from these taxes in Italy increased by 20% to US$60 billion. Carbon regimes such as carbon taxes and cap-and-trade systems are also on the rise as a regulatory instrument to reduce GHG emissions. The state of California, for instance, implemented a cap-and-trade system that established mandatory emission caps and subsequently executed several successful auctions of emissions allowances. In order to offset the impact from these taxes and carbon regimes, countries offer extensive relief opportunities against environmental taxes. Many U.S. states, for example, continue to offer substantial tax incentives for both energy efficiency and renewable energy. On February 15, 2019, the European Commission also announced a new round of funding for the Programme for the Environment and Climate Action (LIFE), offering an additional €3.2 billion53 (on top of its existing €3.4 billion budget54) for environmental and climate action projects. Most companies today have incorporated sustainability strategies into their business planning for several years due to drivers such as energy risks and resiliency, cost reduction, government regulations and stakeholder expectations. As such, Green Matters has the opportunity to establish itself as a leader in supplying sustainable, energy-efficient equipment to the growing number of companies and building owners seeking to capitalize on the various programs and incentives available to them.

Types of Sustainability Incentives Incentives are offered in a broad variety of forms, depending on the jurisdiction: • • • • • • • • •

Tax credits for investments in, or production from, renewable and alternative energy assets; Tax deductions in the form of accelerated depreciation for energy efficient and renewable energy property; Property tax abatements from subnational jurisdictions for renewable energy property and infrastructure; Reduced excise taxes on alternative fuels and fueling infrastructure; Grants and rebates from government entities to encourage sustainability investments; Renewable Energy Credits (“RECs”) purchased by companies and energy providers to comply with government regulations requiring certain levels of renewable energy production; Utility incentives from energy providers to encourage energy efficiency as mandated by government regulations; Feed-in tariffs, which offer production-based incentives for renewable energy producers; Low-interest loans from governments allowing organizations to finance renewable energy and energy efficiency projects.

“Global Sustainability Tax Primer.” Ernst & Young, 2016. “New LIFE funding to trigger EUR 3.2 billion for a greener world.” European Commission, 2019. 54 “LIFE Climate Action.” European Commission, 2015. 52 53

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FIGURE 9: OVERVIEW OF GLOBAL C ARBON REGIMES & SUSTAINABILITY IN CENTIVES

Source: Deloitte, KPMG, Additional Sources.

TABLE 1: GLOBAL TAX AND BUSINESS INC ENTIVES FOR SUSTAINA BILITY INITIATIVES Type of Programs Country

Funding

Tax Credits

Australia

Brazil

China

Colombia

European Union (partial) Denmark x

Canada

France

Germany

Italy

Netherlands

Norway

Spain

Sweden

United Kingdom

Rebates

Examples Multiple financing options, incl. on-bill financing and energy performance contracts (EPC’s) Financing specific to alternative energy application

Various incentives for renewable energy projects Corporate income tax exemptions for up to six years for income derived from qualified energy efficiency Deduction of income tax for 175% of investments made in R&D Subsidies available for energy optimization projects Asset depreciation incentives for equipment used to produce renewable energy Interest rate reductions + grants for energy efficiency projects “Eco Bonus” program supporting the installment of energy efficient equipment Avg. 13.5% tax advantage + additional funding Grants, tax credits & rebates for R&D Funding for new buildings or building restoration to energy efficiency measures Multiple grants for water efficiency in commercial buildings Capital allowances of 18% for capital expenditures on energyefficient machinery or equipment

Detailed description of various Canadian programs are outlined in the following section, 5.3.2 Sustainability Incentives in Canada

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TABLE 1: GLOBAL TAX AND BUSINESS INC ENTIVES FOR SUSTAINA BILITY INITIATIVES (CONT’D) Type of Programs Country

Examples

Funding

Tax Credits

Japan

Asset depreciation incentives (30%) for equipment used to produce renewable energy

Malaysia

Tax allowance of up to 100% of qualifying capital expenditures

Mexico

100% immediate deduction for investment in renewable energy equipment

Rebates

Programs are still being developed,55 but penalties exist

New Zealand Puerto Rico

Russia

30% tax deduction (or $1,500) for alternative energy equipment Accelerated depreciation of energy-efficient assets

Cash incentive up to 50% of costs incurred solely for the purposes of energy efficiency improvements in existing buildings

Singapore

South Africa

Tax deductions for mfg projects that result in energy savings

South Korea

Various incentives for renewable energy projects

Taiwan

Low interest financing to subsidize energy-saving equipment

United Arab Emirates

United States

Government-sponsored financial incentive programs x

State-level and federal tax credits for businesses who invest in renewable resources or energy conservation

5.4.2 Sustainability Incentives in Canada As Green Matters is a Canadian company with its first facility constructed in Richmond, BC, the initial group of targeted consumers may be within the Canadian marketplace. Following the 2015 Paris Agreement, Canada has one of the more aggressive pledges to reduce GHG emissions by 2030, committing to a 30% reduction (from 2005 emissions) by 203056. A 30% reduction of 2005 levels (excluding land use, land-use change, and forestry) equates to 511 MtCO2e, and is equivalent to a 15% reduction below 1990s57. In an effort to meet uphold its commitments, several federal incentives programs have been made available to corporations, commercial facilities and residences throughout Canada. Table 2: Energy Efficiency & Alterative Energy Programs are outlined on the following page. The table lists broad programs, which each have a variety of specific grants and other financial incentives within them. Furthermore, each program shaded in green features programs specific to heat recovery or water heating equipment installation/R&D/upgrades.

“New Zealand’s Tax Working Group recommends Capital Gains Tax” Ernst & Young, 2019. United Nations Framework Convention on Climate Change, 2015. 57 “Canada: Pledges and Targets.” Climateactiontracker.org, 2019. 55 56

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TABLE 2: ENERGY EFFICIENCY & ALTERNATIVE ENERGY PROGRAMS a for Commercial Facilities and Businesses in Canada Type of Programs Broad Program

Energy Mgmt

Arctic Energy Alliance BC Hydro

City of Edmonton

Rebates (RB), Funding (FN) or Financial Incentive (FI)

Retrofit

Financial Incentive

Rebate

FN up to 75% cost of project or $80,000

RB up to $50,000

FN $1,500/building

City of Nelson

On-bill Financing

City of Toronto

Efficiency Nova Scotia

Efficiency PEI Efficiency BC

Enbridge Gas Inc.

Energy Efficiency Alberta

Federation of Canadian Municipalities

FortisBC

Gazifère

RB 30¢ per litre of water saved 0% interest multi-year financing FN up to $1,000 FN for new commercial builds Incentives of 10¢ per m3 of energy saved; FN up to $100,000 FN for upgrades FN for upgrades and new builds FN for upgrades and new builds FN from $900 to $10,000

Government du Québec, Ministère de l'Énergie et des Ressources naturelles

FN for upgrades and new builds

Government of Yukon, Energy, Mines and Resources

FN for upgrades and new builds

Hydro-Québec

Independent Electricity System Operator

Manitoba Hydro

FN up to 50% cost of project or up to $300,000 FN from $25,000 to $90,000; FI at $0.04/kWh of annual savings FN up to $100,000

x x

NB Power

FN up to $75,000 for energy retrofitting projects

Newfoundland Power and Newfoundland and Labrador Hydro

FN for upgrades

Region of Peel

SaskEnergy Town of Banff

Union Gas Limited

Énergir

x x

FI and RB for upgrades

FN for upgrades

FI and RB for upgrades

Condensing boiler incentives: $600/299 MBtu/hr; $1,500/300-999 MBtu/hr; $4,500/1,000 MBtu/hr.

FN from $600 to $25,000

Source: Natural Resources Canada, 2019. a

Green denotes program(s) specific to heat recovery or water heating equipment.

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5.5 ENERGY CONSUMPTION IN COMMERCIAL BUILDINGS Commercial buildings include a variety of building types: offices, hospitals, schools, police stations, places of worship, warehouses, hotels, and shopping malls. Different commercial building activities have unique energy needs, but electricity and natural gas are the most common energy sources used in commercial buildings. Among energy consumption, heating water can account for more than 25% of energy end-use58. Different types of commercial establishments will have different water heating requirements. For example, a laundromat, hotel, or hospital may use significantly larger amounts of hot water compared to an office building. In any case, savings from high efficiency hot water heaters can be substantial. FIGURE 10: WATER CONSUMPTION IN LARGE COMMERCIAL BU ILDINGS Inpatient Healthcare Public Order & Safety Lodging Public Assembly All Large Buildings Other Outpatient Healthcare Education Office Mercantile Enclosed and Strip Malls Warehouse and Storage 0

Water Consumption (gallons per square foot) Source: U.S. Energy Information Administration (2017)

According to the U.S. Energy Information Administration (“EIA”), inpatient healthcare accounted for the most water consumption among commercial facilities59. Due to the significant hot water demand (detailed further in 5.5.1: Healthcare Facilities), hospitals and healthcare facilities will be one of the key markets targeted by Green Matters. Further, the Company has a significant advantage over its competitors in the heat recovery space due to the HRWH’s ability to heat water up to 150°F – a requirement of healthcare facilities due to sterilization purposes. The competitive landscape currently consists of HVAC companies with heat recovery features and add-ons that are limited in their heating capabilities, in that they require the assistance of gas- or oilfueled boilers to meet hospitals’ standards. Currently, Green Matters is the only company that can satisfy these requirements while committing to significantly higher efficiencies and lower emissions.

58 59

“Commercial Water Heating.” Building Codes Assistance Project, 2019. U.S. Energy Information Administration, 2017.

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5.5.1 Healthcare Facilities Healthcare establishments can achieve significant savings by adopting more efficient systems. Studies suggest that the average hospital bed uses as much energy as several residential buildings, if the facility’s total energy consumption was divided by the number of beds60. Moreover, hospitals’ energy use intensity (“EUI”) ranks just below that for the food service sector. The EUI of hospitals and other inpatient healthcare facilities is nearly three times those of typical commercial buildings 61. As medical care and hospitalisation are becoming more expensive, any reduction in the cost of bed occupation is considered a priority. Hospital buildings are also one of the few types of building that run at full-scale 24 hours a day. HVAC systems in hospitals requires comfort, safety and hygiene. Hospitals must maintain the temperature, air quality, air flow and humidity to create the most comfortable ENERGY USES IN HEALTHCARE FACILITIES environment possible for its patients. Ventilation in hospitals also controls hazards because there are frequently fumes, OTHER, airborne pathogens and chemicals in the air that could cause 9% harm. The various areas in hospitals have different air conditioning systems depending on their functions. Between 35 and 60% of the annual energy costs of the typical healthcare facility are related to the operation of HVAC systems, depending on the climate62. Increasing demand for comfort in rooms, coupled with high internal loads, has led to a significant increase in cooling requirements63. This serves as an exceptional opportunity for Green Matters’ HRHW, which is reliant upon the air conditioning units in a building.

WATER HEATING, 30%

SPACE HEATING, 57%

COOKING, 4%

Source: Energy Information Administration

Hot Water Consumption in Hospitals As previously noted, water consumption and hot water demand are significantly higher in hospitals than other commercial facilities, due to the nature of a healthcare facility (stringent hygiene and safety standards, sterilization requirements, high priority on patient comfort, etc.) and the 24-hour operations. Domestic hot water consumption (“DHW”) within hospitals has been documented since 199964, with studies finding annual consumption of DHW ranging from 36.5 to 54.75 m3 per bed in the United States65. This assumption was utilized to estimate the annual DHW consumption of healthcare facilities in British Columbia, Canada (Table 3: Annual Hot Water Consumption in BC Hospitals.) Table 3 shows the 21 largest hospitals and healthcare facilities in the province, with a low estimate of DHW per bed (based on Canadian Institute for Health Information’s database of hospital beds in FY2018.)

“Designing energy efficient hospitals? First let’s give you the facts on existing performance.” Western Cape Government Health Department, 2015. 61 “Energy usage and efficiency at medical facilities.” EE Publishers, 2018. 62 “A boiler room in a 600-bed hospital complex: study, analysis, and implementation of energy efficiency improvements” Energies, 2014. 63 “Environmental report 2016” Netcare, 2016. 64 “Applications of Installations in Hospitals.” National Technical University of Athens: Athens, Greece, 1999. 65 Energy and Buildings, 2010. 60

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TABLE 3: ANNUAL HOT WATER CONSUMPTION IN BC HOSPITALS (In Million Liters) 2017-2018 Location

Beds

DHWa

Location

Beds

DHWa

UBC Health Sciences Centre

1,015

37.05

Tofino General Hospital

379

13.83

Vancouver General Hospital

1,003

36.61

Mt. St. Mary Residential Care

364

13.29

Surrey Memorial Hospital

692

25.26

Queen’s Park & Fellburn Care

350

12.78

Holy Family Hospital

552

20.15

St. Paul’s Hospital

336

12.26

Cowichan District Hospital

487

17.78

Ridge Meadows Hospital

319

11.64

Port McNeill & District Hosp

486

17.74

Burnaby Hospital

300

10.95

Sechelt Hospital

455

16.61

Abbotsford Regional Hospital

281

10.27

Royal Columbian Hospital

454

16.57

Royal Inland Hospital

274

10.00

Abbotsford General Hosp

422

15.40

BC Cancer Agency

274

10.00

Kelowna General Hospital

420

15.33

Fraser Canyon Hospital

248

9.05

Peace Arch District Hospital

412

15.04

Totalb

14,901

543.89

Source: Canadian Institute for Health Information (2019); Energy and Buildings (2010). a

DHW: Domestic Hot Water Consumption (Low Estimate) in million liters. Total for all 99 hospitals in British Columbia. For the complete list, see: Appendix II: Annual Hot Water Consumption in BC Hospitals. b

In FY2018, there was a total of 14,901 hospital beds available in British Columbia, Canada. Utilizing the metrics published in Energy and Buildings (2010), the annual consumption of domestic hot water in BC hospitals range from 543.89 to 815.83 million liters, or 143.68 to 215.52 million gallons. While energy costs vary significantly depending on facility size, age, location and other factors, an assumption can be made that hospitals, particularly larger facilities with 400+ beds, utilize a significant amount of energy to cater to the high demand of hot water. For example, in the United States, a typical 200,000 ft.2 50-bed hospital annually spends $680,00066—or roughly $13,611 per bed—on electricity and natural gas.

If water heating accounts for about 30% of energy costs 67, the average 50-bed hospital would allocate $2 04,000 in energy costs – over $112,200 (55%+) of which could potentially be saved utilizing Green Matters’ HRWH. These savings would be significantly greater for larger hospitals with greater demands for hot water, as demonstrated in Table 3. By increasing energy efficiency, hospitals can improve the bottom line and free up funds to invest in new technologies and improve patient care. 66 67

“Survey of commercial buildings.” U.S. Energy Information Administration, 2003. U.S. Energy Information Administration, 2004.

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5.5.2 Lodging Facilities and Hotels Hospitality is one of the major economic drivers in the world. As such, conserving energy and savings on energy costs can dramatically increase profitability, as well as economic output such as employment (particularly with tourism-dependent nations such as Mexico and Brazil.) Energy costs can range from 5-10% of a hotel’s revenue68, with luxury/upper-scale establishments incurring higher energy expenditures. Furthermore, for every 1,000 kWh of energy a hotel can save, approximately 1,119 pounds of CO2 emissions will be prevented69. Such energy savings can also aid in the hotel’s sustainability marketing and promotion, which has become increasingly more important to guests, which further impacts the bottom line. FIGURE 11: LODGING FACILITY ANN UAL ENERGY CONSUMPTI ON BY END-USE

Source: U.S. Energy Information Administration

A report in the Journal of Technology Innovations in Renewable Energy studied water consumption in the hospitality sector, and noted the relationship between hot water consumption and occupancy rate throughout the year70 (Figure 12: Hot Water Consumption & Occupancy Rate throughout the Year) at the renowned Hôtel des Thermes in Antsirabe, Madagascar. FIGURE 12: HOT WATER CONSUMPTIO N & OCCUPANCY RATE THRO UGHOUT THE YEAR Occupancy Rate

Hot Water Consumption (g)

100%

2000

50%

1000

0 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Source: Journal of Technology Innovations in Renewable Energy (2015) “Managing Energy Costs in Full-Service Hotels.” National Grid, 2004. “Reducing Energy Use in the Hospitality Industry.” EcoVision, 2016. 70 “Techno-Economic Investigation of a Thermal Cure Center Excess Heat Recovery System for Producing Hot Water for a Hotel in Antsirabe Madagascar.” Journal of Technology Innovations in Renewable Energy, 2015. 68 69

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Water consumption is directly related to the occupancy rate of a hotel; as such, energy costs can be calculated on a per bed/room basis. Water Management, Inc. estimates that approximately 120 gallons of water is consumed per room/per day71. Compared to additional studies, this serves as a conservative estimate. For example, Colorado WaterWise, a conservation organization catering to Colorado, notes estimates as high as 400 gallons per room/per day72. Further, the EIA estimates that the average hotel spends US$2,196 per available room in energy costs73, with 31% of said costs being allocated to heating water74. Utilizing the conservative estimates from the EIA and Water Management, Inc., water usage and respective energy costs were calculated for the ten largest hotel groups in the world (Table 4: Top 10 Leading Hotel Groups.) TABLE 4: TOP 10 LEADING HO TEL GROUPS Hotel Group

Countries

Total Properties

Total Rooms

Water Usage per Day (g) a

Energy Costs b

Energy Costs for Hot Water c

Marriott International, Inc.

110

7,003

1,200,000

144,000,000

$2,926

$907

Hilton

103

5,685

912,960

109,555,200

$2,004

$621

Wyndham Hotel Group

153

7,400

809,933

97,191,960

$1,778

$551

100

6,026

744,000

89,280,000

$1,633

$506

5,977

602,350

72,282,000

$1,322

$410

AccorHotels

4,000

570,000

68,400,000

$1,251

$388

Hyatt Hotels Corporation

679

208,207

24,984,840

$457

$141

NH Hotel Group

400

60,000

7,200,000

$131

$40

Meliá Hotels International

374

49,213

5,905,560

$108

$33

Shangri-La Hotels and Resorts

38,000

4,560,000

$83

$25

36,037

5,094,044

611,285,280

$11,699

$3,626

InterContinental Hotels Group PLC (IHG) Jin Jiang International Hotel Management Co. Ltd.

Total

Source: Individual Hotel Group Websites; Water Management, Inc. (for Water Usage calculation); EIA (for Energy Costs calculations.) a

Water Usage: Derived by using Water Management, Inc.’s assumption of 120 gallons per room/day for hotels.

Energy costs were calculated using the EIA’s estimate of hotels spending an average $2,196/room in energy costs,75 in million USD$.

Costs were calculated using the EIA’s estimate of 31% of energy costs being allocated for heating water,76 in million USD$.

The Company is already present in one of the 7,003 Marriott properties, whose collective energy costs for heating water are estimated to be nearly $1 billion. If Green Matters were to expand and distribute its HRWH systems across all Marriot locations, the hotel group could save 55-65% on energy costs: approximately half a billion dollars in savings. These are also conservative estimates, as the calculations do not account for higher energy costs relative to luxury hotel brands and their added amenities.

Water Management, Inc., 2015. “120 gallons per room/day for hotels.” Colorado WaterWise, 2015. 73 U.S. Energy Information Administration, 2018. 74 U.S. Energy Information Administration, 2016. 75 U.S. Energy Information Administration, 2018. 76 U.S. Energy Information Administration, 2016. 71 72

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If Green Matters were to expand and distribute its HRWH systems across all Marriot locations, the hotel group could save 55-65% on energy costs: approximately half a billion dollars in savings.

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Dormitories Much like hotels, dormitories are a space Green Matters can target. Dormitories are domiciliary facilities usually associated with an educational facility such as an academy, school, college, or university. In addition to the student rooms or suites, these buildings commonly have large dining and kitchen facilities, laundry, computer and study areas, administrative offices, and common areas for recreation. They often are multi-story buildings, some being high-rises in downtown city campuses. As the trend is to increase year-round usage, most new dormitories include air conditioning. Dormitories vary in design; some may include individual or double-occupancy student rooms with common bathrooms for each floor, while others consist of suites that contain a small living/dining area, kitchen, bathroom, and two or more bedrooms. Hot water requirements for college dormitories generally include showers, restrooms, service sinks, and washing machines and dryers. However, peak demand usually results from the use of showers. Load profiles and hourly consumption data indicates that peaks may last one or two hours, and then taper off substantially. AO Smith, a reputable water heater and boiler manufacturer, derived the hot water requirements for dormitories by number of occupants (Table 5: Hot Water Requirements for Dormitories.) Green Matters is able to satisfy such requirements at reduced operating costs and higher efficiencies. TABLE 5: HOT WATER REQUIREMENTS FOR DOR MITORIES Gallons Required for 1 hr Period - 40°F Water Number of Occupants 1-10 11-15 16-20 21-25 26-30 31-40 41-50 51-75 76-100 101-125 126-150 151-175 176-200 201-250 251-300 301-350

3 GPM 40°F Inlet 100° TR 125 187 250 277 300 320 350 412 500 625 750 875 1,000 1,250 1,500 1,750

60°F Inlet 80° TR 100 150 200 220 240 264 280 330 400 500 600 700 800 1,000 1,200 1,400

Source: AO Smith, 2010.

* Storage capacities shown are theoretical minimums.

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5 GPM (Shower HD) 40°F Inlet 60°F Inlet 100° TR 80° TR 200 160 299 239 400 320 443 354 480 384 512 410 560 448 659 527 800 640 1,000 800 1,200 960 1,400 1,120 1,600 1,280 2,000 1,600 2,400 1,920 2,800 2,240

Minimum* Storage Capacities 100 150 200 225 240 280 310 400 430 475 510 560 600 650 720 800

5.5.3 Recreational and Sports Facilities Stadiums and arenas are essential components in the fabric of sports, and they serve a significant role in communities across the globe. In a response to the increased public awareness of the impending climate crisis, many communities, organizations and sectors of the economy are prioritizing the need to reduce energy and water use. Global communities can achieve significant savings while also inspiring an enormous number of fans to take action. By many accounts, stadiums and arenas represent an important link to a nation’s values and priorities. As an example, over 240 million U.S. fans visit sports venues annually and viewers spend 31 billion hours watching sporting events on TV each year77. Total square footage of these facilities easily reaches into the hundreds of millions. With at least 1,500 such sports facilities around the country, with organizations generating $22.6 billion in annual revenue, the sports sector is a significant influence on the national economy and culture. TABLE 6: TOP 10 STADIUMS IN T OTAL ATTENDANCE (201 8) Country

Games

Average Attendance

Total Attendance

Yankee Stadium

USA

35,977

3,525,741

Busch Stadium

USA

42,524

3,444,490

Rogers Centre

Canada

41,880

3,392,299

Oracle Park

USA

41,546

3,365,256

Wringley Field

USA

39,906

3,232,420

Angel Stadium

USA

37,236

3,016,142

Tokyo Dome

Japan

41,724

3,004,108

Fenway Park

USA

36,486

2,955,434

Australia

48,622

2,917,313

Stadium

Melbourne Cricket Ground

Sources: Statista (2018), World Football (2018), Forbes (2018), Total Sportek (2018).

Many sports organizations and facilities have undertaken actions to improve energy and water performance of venues, reduce operating costs and engage their communities. For example, over six years, the Seattle mariners saved approximately $1.5 million in utility costs through investments in energy and water savings78. Furthermore, the University of Minnesota saves $412,000 annual through the implementation of energy conservation measures79. In terms of sustainability and energy-efficiency efforts, the National Hockey League (“NHL”) and AEG Worldwide lead the way in benchmarking their performance and monitoring their progress. Green building rating programs, such as the U.S. Green Building Council’s (“USGBC”) Leadership in Energy and Environmental Design (“LEED”), allow owners, operators and designers to think holistically about implementing sustainable design and operations practices. To date, 80 venues have utilized LEED80. “Advancing Energy and Water Efficiency in Stadiums and Arenas.” National Institute of Building Sciences, 2017. “Case Study: Safeco Field, Home of the Seattle Mariners.” NRDC, 2019. 79 “Case Study: University of Minnesota, Home of the Golden Gophers.” NRDC, 2019. 80 “Sports Stadiums Help Lead the Way Toward Greener Architecture.” The New York Times, 2018. 77 78

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Lighting and plumbing retrofits, as well as the installation of renewable energy systems (most commonly solar photovoltaics), are growing as venues share their successes and owners and operators understand the savings opportunities81. While the common perception is that sports venues were designed for a single purpose (i.e. to be utilized for the 81 home games of a baseball season or eight games of a football season), an increasing number of venues, particularly arenas in urban markets, are looking to optimize the use of their facilities throughout the year. While MLB and NFL stadiums may not host daily events that draw large crowds, many of the facilities remain operational to some degree most of the year, either hosting small community or fan events, providing tours, or as office space for the team or facility operations. In 2018, the NHL published its 2018 Sustainability Report82, the second installment following the first-ever report of its kind in 2014. The report assessed the League's environmental impact, citing the following: •

•

The NHL consumed 1,252,000 mmBtu’s of energy in FY2016. The League has taken measures to reduce energy through the installation of more efficient lighting, enhanced building management systems, waste heat recapture technologies and onsite renewable energy generation; The League saw a 2% year-over-year reduction in CO2 emissions from FY2014 to FY2016, from 189,503 to 182,353 metric tons.

In terms of water consumption, the NHL uses 321 million gallons of water, or 247,746 gallons per game. The NHL continues to make a notable effort to in reducing its carbon footprint, and Green Matters is a viable option to aid the League in meetings its emissions targets. The League’s 2018 sustainability report noted the implementation of heat recovery technologies, but the NHL saw a mere 1% reduction from FY201483. This creates an opportunity for Green Matters, whose HRWH technology has been proven to reduce emissions and operating costs significantly.

5.5.4 Mercantile and Shopping Centres Shopping centres are sizeable energy consumers, with significant opportunities for savings. As individuals spend more and more time in shopping centres, a priority is established on creating and sustaining comfortable environments. However, heating, air quality and adequate lighting for customers are all expensive:

The average energy consumption for such centres is about 300 kWh per square metre 84, and they generate high levels of CO2 emissions and waste.

“Advancing Energy and Water Efficiency in Stadiums and Arenas.” National Institute of Building Sciences, 2017. NHL 2014 Sustainability Report, 2018. 83 NHL 2014 Sustainability Report, 2018. 84 Phys.org, 2016. 81 82

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The EIA estimates that across shopping centres and malls, approximately 34 gallons of water are consumed per thousand ft.2 per day85. The table below (Table 7: 20 Largest Malls in Canada) examines the largest shopping centres in Canada (by size of retail space) with each respective calculation of estimated water consumption. TABLE 7: 20 LARGEST MALLS IN CANADA Mall Name

Province

Retail Space (ft.2)

Est. Water Consumption/Year (g)a

West Edmonton Mall

3,800,000

47,574,100

Square One

2,200,000+

27,542,900

Metropolis at Metrotown

1,795,591

22,479,902

Eaton Centre

1,722,000

21,558,579

Yorkdale

1,700,000

21,283,150

Rideau Centre

1,545,113

19,344,042

Galeries de la Capitale Chinook Centre Park Royal

QC AB BC

1,496,000 1,374,580 1,370,000

18,729,172 17,209,054 17,151,715

Scarborough Town Centre

1,300,000

16,275,350

Vaughan Mills

1,270,111

15,901,155

Carrefour Town Centre

1,243,000

15,561,739

Guildford Town Centre

1,203,584

15,068,270

Tsawwassen Mills Polo Park Laurier Québec

BC MB QC

1,200,000 1,198,577 1,192,879

15,023,400 15,005,585 14,934,249

Sherway Gardens

1,182,000

14,798,049

Carrefour de l’Estrie

1,160,329

14,798,739

Oshawa Centre

1,140,887

14,283,335

26,894,651

364,250,483

Total

a Calculated using the EIA’s estimate of 34.3 gallons of water consumed/thousand square feet/day, per the organization’s 2017 report.

The largest twenty facilities consume about 364 million gallons of water per year. As of May 2017, there are an additional 3,722 shopping centres in the nation86. While shopping centres as a whole have witnessed a steady decline in retail traffic87, the Wall Street Journal notes opportunities for existing retail outlets, calling for more experience-oriented amenities and developments. As consumer preferences shift toward immersive experiences88, strip malls and shopping centres will have no choice but to adapt. As such, upgrading existing facilities to be more energy-efficient and better-suited for additional functions (outside of retail and food amenities alone) will be crucial. Utilization of Green Matters’ HRHW will be an ideal option for many such operations.

U.S. Energy Information Administration, 2017. “How neighbourhood malls are struggling to survive.” Toronto Star, 2017. 87 “The Fall Of The Mall And How To Make Them Rise Again.” Forbes, 2018. 88 “Forget dinner and a movie, ‘immersive’ high-adrenaline adventures catching on with millennials.” Financial Post, 2015. 85 86

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5.5.5 Educational Facilities Energy consumption with educational facilities are also worthy to note. According to the Orlando Utilities Commissions (“OUC”), colleges and universities in the US use an average of 17 cubic feet of natural gas per ft2 annually89, and typical US higher-education buildings sized around 50,000 ft2 consume more than $100,000 worth of energy each year. Space heating accounts for the bulk of natural gas consumption90 (Figure 13: Energy Consumption by End-Use in US and Canada), while statistics from Canadian universities show space heating, water heating and lighting to have nearly equal shares of energy consumption91. FIGURE 13: ENERGY CONSUMPTION BY END-USE IN US AND CANAD A

Canada

United States

(EDUCATION BUILDINGS)

(COLLEGE & UNIVERSITY EDUCATION BUILDINGS)

LIGHTING, 9%

WATER HEATING, 6%

WATER HEATING, 25%

AUXILIARY MOTORS, 6%

SPACE HEATING, 28%

AUXILIARY EQUIPMENT, 2% S PAC E C OO L ING, 4 %

SPACE COOLING, 2%

V ENTIL A TIO N , 4 %

SPACE HEATING, 75% OT HER , 3 % O FF IC E EQ UIP ME NT , 3 %

LIGHTING, 31%

R EF RI GE RA TIO N , 2 %

Source: data from Natural Resources Canada and U.S. Energy Information Administration

According to water consumption estimates reported by the EIA, 68.4 gallons of water are consumed per individual, per day in educational facilities92. As of 2018, 504,011 students are enrolled in the 10 largest universities in Canada93. Applying the EIA’s estimates, the demand for water would equal approximately 34.5 million gallons a day, and 12.6 billion gallons annually.

5.6 THE OPPORTUNITY From healthcare facilities to sports venues, international hotels and universities, Green Matters has a unique and timely opportunity to offer energy-efficient water heating technology that is proven to dramatically reduce operating costs. As observed in this chapter, all such facilities have considerable annual demands for domestic hot water, and spend a significant amount to satisfy those demands. With the Company’s Proof of Concept having generated savings of 55-65%, each industry can significantly benefit from Green Matters’ proprietary heat recovery system.

“Average energy use data.” Orlando Utilities Commission, 2019. U.S. Energy Information Administration, 2003. 91 Natural Resources Canada, 2014. 92 U.S. Energy Information Administration, 2017. 93 Calculated using multiple sources, namely individual university websites. 89 90

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6 Competitive Landscape Limitations of Competing HVAC Companies 6.1 COMPETITIVE ANALYSIS A limited number of manufacturers are developing heat recovery technologies and primarily produce water chillers (for air conditioning) that offer heat recovery as an available option. Each manufacturer examined by Green Matters produces heat recovery options that share the following characteristics: ▪ ▪ ▪ ▪ ▪

Their heat recovery equipment is only compatible with their own HVAC equipment; Their existing models of heat recovery equipment operate within a relatively narrow band of temperatures and require the assistance of a boiler to achieve wider range temperatures; The maximum temperature that can be imparted to receiving water is 140 F (not feasible for healthcare facilities and commercial buildings with similar requirements); The equipment cannot be easily retrofitted; Overall COP (coefficient of performance) is much lower.

These manufacturers are profiled below. CARRIER CORPORATION (“CARRIER”) Carrier has been operating in the air conditioning business since 1902. The firm currently has 51 factories and 39 research and design centers worldwide and distributes its products to over 180 countries. Carrier primarily produces air conditioning equipment that caters to the following segments: (i) home heating and cooling solutions; (ii) building solutions; (iii) refrigeration equipment that maintains appropriate temperatures for food and beverages and medical supplies during transport; and, (iv) commercial refrigeration. The firm currently offers two models of chillers that have features for heat recovery: (i) 30XW Chiller that is between 150 and 400 tons and can raise receiving water up to 140°F in heat recovery; and, (ii) 30HX Chiller that is between 75 to 265 tons and can raise receiving water up to 135°F in heat recovery. Both models require the assistance of a gas boiler.

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YORK INTERNATIONAL C ORPORATION (“YORK”) York provides furnaces, air conditioners, heat pumps, thermostats, and other heating/cooling related products designed for residential and office applications. The company is a subsidiary of public company Johnson Controls Inc. (NYSE: JCI) Currently, York has one chiller with a heat recovery feature: the York MaxE, which is between 120 and 455 tons and raises receiving water up to 130°F with the assistance of a boiler. TRANE Trane is a renowned leader in air conditioning systems, services, and solutions. Products offered by the company include: chillers, air handling systems, and terminal devices. Trane is a subsidiary of public company Ingersoll Rand (NYSE: IR). Trane operates in various market segments ranging from hospitality, commercial real estate, schools and post-secondary institutions, healthcare facilities, and retail establishments. Currently, the firm has two chiller models with heat recovery features: (i) Trane RTHD that is between 150 to 430 tons, providing heat recovery up to 114°F; and (ii) Trane RTWD that is between 80 to 250 tons, and provides heat recovery up to 140°F. Both models require the assistance of a gas boiler.

6.2 COMPETITIVE ADVANTAGE In general, the Trane, Carrier and York chiller units feature heat recovery as an add-on feature, and are most suitable for new construction. As such, these types of units are not practical for retrofit options. Moreover, chiller units with added heat recovery features are only capable of preheating the water within selective temperature ranges (e.g. 90°F - 110°F or 120°F -140°F) and ultimately rely on the assistance of a gas boiler to continue the water heating process. This makes them less efficient and produces more emissions, compared to the Green Matters’ HRWH. Trane, Carrier and York chiller units with added heat recovery features are also more costly than the Green Matters HRWH combined with a suitable water chiller. Furthermore, each of their heat recovery options are compatible exclusively with their own equipment; the Green Matters HRWH can be adapted to any HVAC system. The Green Matters HRWH was tested in the winter of 2013 prior to installation in Puerto Rico. The unit is designed to heat water up to 150°F from 95°F inlet evaporator water. A significant advantage to the HRWH is the use of a doubled-walled heat exchanger on the condenser. While this degrades heat transfer efficiency, it allows potable water to be heated directly without the requirement of a secondary heating loop. During these tests, the unit was able to output 1,490 MBTU/hr heating load and achieved a COPh of 5.5. Measured performance during and after installation showed the HRWH operating as expected under actual conditions. Continuous research and assessment of competitors’ products have led the Company to conclude that competing products are best suited for new facilities and not appropriate for retrofit installations. Green Matters is confident the HRWH can provide an efficient, cost-effective solution to replacing water boilers and provide substantial cost savings in either the retrofit or new build applications.

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7 Sales and Marketing Plan Addressing Key Global Markets 7.1 TARGET MARKETS AND CONSUMERS Green Matters will be targeting commercial and residential facilities, operating across multiple industries in various jurisdictions around the world. Selection of the key markets will be predicated on the following criteria: PREVALENCE OF HVAC SYSTEMS, NAMELY AC UNITS, IN WARM CLIMATES As the Company’s HRWH system is reliant on existing AC/chiller units, Green Matters will initially target warmer regions where air conditioning equipment is ubiquitous. This includes regions such as South America, the Middle East, Oceania and Africa. Targeting warmer climates is also ideal due to the fact that many warmer regions have high tourism rates and thriving hospitality industries. PROGRESSIVE ENVIRONM ENTAL POLICIES AND R EGIMES Green Matters’ greatest value proposition is the considerable savings amassed by the consumer. As such, targeting jurisdictions with added financial incentives, tax credits and rebate programs will further reduce each client’s operating costs. The fortunate reality is that most countries have now implemented such programs, with legislation and both federal- and state-level policies evolving each passing year.

7.1.1 Current Carbon Regimes by Region Most companies today have incorporated sustainability strategies into their business planning for several years due to drivers such as energy risks and resiliency, cost reduction, government regulations and stakeholder expectations. As such, Green Matters has the opportunity to establish itself as a leader in supplying sustainable, energy-efficient equipment to the growing number of companies and building owners seeking to capitalize on the various programs and incentives available to them.

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OVERVIEW OF GLOBAL C ARBON REGIMES & SUST AINABILITY INCENTIVE S

Source: Deloitte, KPMG, Additional Sources.

7.2 SALES PLAN To be added.

7.2.1 Customer Acquisition Process To be added.

7.3 STRATEGIC MARKETING PLAN Green Matters recognizes that marketing efforts must be focused on customer education and establishing brand presence and visibility that will set the Company’s HRWH apart from its competitors. As the Company’s target customers reside in warmer climate countries, marketing efforts will vary depending on local customs and media channels. Marketing and promotional efforts will emphasize the HRWH’s efficiency and cost-saving benefits. If the Company can successfully promote the HRWH on these points, growth in sales and customer base will occur rapidly. In its promotional efforts, Green Matters will rely on the case study data produced from its initial sale at the Marriott hotel in Puerto Rico. By providing case studies to prospective customer leads, the Company can educate the customer on the benefits of the HRWH with proven performance data. As the Company accumulates a growing customer base, Green Matters will continue to conduct research and data analysis to compile a database of analytics for its customers.

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A key objective in the Company’s marketing plan is to target metropolitan cities in warmer climates that typically have high population density and/or are deemed attractive tourist locations. These locations tend to have high temperatures, large populations, and have a number of hotels, hospitals, and other buildings that require air conditioning to cool rising temperatures. The Company is confident sales will gain traction in the Caribbean Islands based on the success of its initial sale in Puerto Rico. Green Matters has identified several countries in the Caribbean that fit these criteria and is actively seeking customer contacts, distribution partners, and repairs and maintenance staff in each of these countries. Key aspects of the marketing plan are highlighted below. Green Matters plans to develop a marketing strategy based on the HRWH’s selling points. ENERGY AUDITS Green Matters understands the importance of providing documentary proof of the efficiency and costsavings advantages of the HRWH to potential customers. Accordingly, the Company will provide an energy audit of the prospective customer’s existing energy usage and costs and compare them to those generated by the HRWH. Green Matters is confident such a data driven comparison will provide prospective customers the information necessary to make an informed purchase. CASE STUDIES Green Matters will provide customers with marketing brochures, pamphlets, and documents that include performance data which illustrate the substantial savings available from an HRWH. EARNED MEDIA As the Company gains traction in terms of exposure and marketability, management expects to receive press coverage from traditional media sources and anticipates such news stories to continue as sales grow. INVESTOR RELATIO NS & PRESS RELEASES Green Matters’ in-house marketing team will provide media releases/kits for updates and news on the Company’s HRWH and continuous research and development. INDUSTRY SHOWS AND E VENTS The Company will attend various industry trade shows, conferences, and seminars that promote clean tech and green appliances/machinery targeting the overall HVAC industry. Such events provide excellent opportunities for identifying new suppliers, distribution channels, and customers and generate opportunities for potential merger and acquisition targets. FIRST-HAND EXPERIENC E More in-depth education and public viewings will be offered at the Company’s showroom facilities. The Company anticipates marketing strategy and tactics will evolve over time as the HRWH gains momentum and appropriate channels and media are identified that align with the Company’s long-term objectives. In all of its efforts, Green Matters will focus on the features that benefit its customers.

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7.4 CORPORATE POSITIONING Developing corporate positioning statements is vital to enable Green Matters to capitalize on enhancing consumers’ experience with the technology, particularly while the heat recovery technology market is in its infancy. The Company intends to assure the public knows that Green Matters’ proven technology and operations are more cost- and energy-efficient than its competitors’.

7.5 OFFLINE MARKETING 7.5.1 Marketing Collateral Green Matters will prepare all advertising for each market. The Company will prepare high-quality collateral materials that will reinforce its brand as well as the HRWH. These print materials will be informative and designed to reach target industry players. Brochures and marketing literature will be posted to specific customers. Brochures will display the complete range of advantages offered by the HRWH. Considerable thought will go into developing these important documents as a frontline information piece for products. Some of these materials will be: • • •

Brochures for all customer sectors; Brochures for sales reps; Tradeshow materials.

7.6 ONLINE MARKETING 7.6.1 Web Development Plan Green Matters will maintain its corporate website (www.greenmattersinc.com), which hosts information about the Company, its products and operations. The purpose of the Web Development Plan is to ensure a central platform that reinforces the Company’s brand messaging is available to the target demographic and the public at large. • • • •

Responsive web design; Attractive, appealing and user-friendly design; Utilization of UX/UI best practices; A full set of ‘Calls to Action’ (CTA’s) to elicit consumer response and engage the target audience, as well as capture consumer data for future marketing strategies.

7.6.2 Online Marketing Strategies CONVERSION RATE OPTI MIZATION (CRO) Using videos on landing pages increases conversion rates by 86%.94 Green Matters has the option of displaying video footage of the HRWH in-action in the Marriott hotel in Puerto Rico, or other locations as the Company expands its client base (e.g. hospitals, sports venues, etc.)

Furthermore, 90% of users who search a product/service online has not made their mind up about a brand prior to starting the search.95 The Company has the opportunity educate and communicate its brand messaging to effectively capture the consumers’ attention and build brand loyalty. 94 95

Wordstream, 2018. Status Labs, 2018.

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LOCAL SEARCH E NGINE OPTIMIZATION ( SEO) 72% of consumers who did a local search visited a facility within 5 miles. 96 Utilizing keywords specific to the Company’s location, or location of the Company’s select target market, is likely to be most effective in gaining the attention of potential clients. Local searches also lead 50% of mobile users to visit stores or facilities within 24 hours.97 ORGANIC SEARCH Google is responsible for 94% of total organic web traffic98 and 70-80% of search engine users are focused solely on organic results.99 Furthermore, 61% of marketers state that improving SEO and growing organic presence is the top inbound marketing priority.100 This affirms the priority of targeting consumers through effective key words that assist in communicating the Company’s brand messaging.

7.7 INDUSTRY ASSOCIATIONS Green Matters is a recognized member of the Canada Green Building Council (“CaGBC”). The Company will join additional like-minded organizations in an effort to speak to a wider audience.

Canada Green Building Council | cabgc.org The CaGBC is a not-for-profit, national organization that has been working since 2002 to advance green building and sustainable community development practices in Canada. The CaGBC is the licence holder for the LEED green building rating system in Canada and supports the WELL Building Standard and GRESB (“Global Real Estate Sustainability Benchmark”) in Canada. With the organization’s membership of over 1,200 industry organizations and more than 2,500 individual Chapter members involved in designing, building and operating buildings, homes and communities, the Council has made excellent inroads toward achieving CaGBC’s mission of reducing the environmental impact of the built environment. Acting as the voice of the green building industry, the CaGBC advocates for green building policies with all levels of governments and the private sector across Canada. The Council has also educated over 45,000 green professionals to answer the demand for knowledge and jobs this new green marketplace created. As a result of this advocacy, education and the hard work of its members, thousands of commercial and government buildings, schools, homes, community centres and historical structures have been retrofitted or newly constructed to green building standards.

Since 2005, these LEED buildings have eliminated 2,490,000 CO2e tonnes of GHG emissions annually, diverted nearly 3 million tonnes of waste from landfill , and saved 24 billion litres of water per year, benefiting all Canadians.

Wordstream, 2016. Google, 2018. 98 Web Presence Solutions, 2017. 99 MarTech, 2018. 100 Hubspot, 2018. 96 97

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7.8 TRADESHOWS AND EVENTS In an effort to further form strategic alliances and/or build a database of sales leads, Green Matters will either participate in or attend various HVAC-related events, trade shows and conferences. These networking opportunities may be influential for the Company in terms of labor/added human capital, new and innovative technologies, sales leads and more. 2019 FOCUS CONFERENCE Fort Worth, Texas | September 11-13, 2019 THE 25 TH IIR INTERNATIONAL CONGRESS OF REFRIGERATION Montreal, Quebec | August 24-30, 2019 BUILDING SIMULATION 2019 Rome, Italy | September 02-04, 2019 ACEEE NATIONAL CONFERENCE ON ENERGY EFFIENCY AS A RESOURCE Minneapolis, Minnesota | October 15-17, 2019 2019 SMACNA ANNUAL CONVENTION Austin, Texas | October 20-23, 2019 ASHRAE WINTER CONFERENCE Orlando, Florida | February 01-05, 2020

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8 Financial Analysis Green Matters 5-Year Projections 8.1 CAPITAL REQUIREMENT The Company is currently seeking $5.0 million in financing from private investors to increase sales and marketing efforts for the HRWH. Funds from the Financing will also be devoted to leasing a larger facility to manufacture, test, and store HRWH devices. Any residual funding will be applied to general working capital purposes.

8.2 USE OF PROCEEDS To be added.

8.3 REVENUE ASSUMPTIONS To be added.

8.4 REVENUE SUMMARY To be added.

8.5 PROFITABILITY AND ROI To be added.

8.6 INCOME STATEMENT To be added.

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8.7 BALANCE SHEET To be added.

8.8 CASH FLOWS To be added.

8.9 BENCHMARKS AND BREAKEVEN ANALYSIS To be added.

8.10 RATIOS ANALYSIS To be added.

8.11 SENSITIVITY ANALYSIS To be added.

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9 Bibliography Adler, B. “The Green New Deal isn’t big enough.” May 02, 2019. The Washington Post. Retrieved from: https://www.washingtonpost.com/news/posteverything/wp/2019/05/02/feature/the-greennew-deal-isnt-too-big-its-not-nearly-big-enough/?noredirect=on&utm_term=.e8d7801c7b72 Allied Market Research. “Renewable Energy Market by Type (Hydro & Ocean Power, Wind Energy, Solar Energy, Bioenergy, and End User: Global Opportunity Analysis and Industry Forecast, 20172025” Sep. 05, 2018. Allied Market Research. Retrieved from: https://www.prnewswire.com/news-releases/renewable-energy-market-to-garner-2-152-9billion-by-2025-at-4-9-cagr-says-allied-market-research-857225928.html Allied Market Research. “Water Heater Market by Type, Application, and Distribution Channel: Global Opportunity Analysis and Industry Forecast, 2018 - 2025” December 2018. Allied Market Research. Retrieved from: https://www.alliedmarketresearch.com/water-heater-market André, C. & Hwang, H. “Tax reform to support growth and employment in Finland: Economics Department Working Papers No. 1468” May 24, 2018. Organisation for Economic Co-operation and Development. Retrieved from: http://www.oecd.org/officialdocuments/publicdisplaydocumentpdf/?cote=ECO/WKP(2018)16& docLanguage=En APER. “Extending the Federal Renewable Energy Investment Tax Credit (ITC) Program in Puerto Rico” Asociación de Productores de Energía Renovable. Retrieved from: https://www.finance.senate.gov/imo/media/doc/Puerto%20Rico%20Association%20of%20Rene wable%20Energy%20Producers.pdf ASHRAE. "Non-residential cooling and heating load calculations” Jun. 01, 2013. ASHRAE Handbook of Fundamentals.

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BCEHS. “BC Hospital Bed Registry” 2019. BC Emergency Health Services. Retrieved from: http://www.bcehs.ca/health-professionals/health-care-providers/bcptn-hospital-bed-registry BEF. “Water Use Calculator” 2019. Bonneville Environmental Foundation. Retrieved from: https://store.b-e-f.org/calculate-business-footprint/water/#water_use Belson, K. “Sports Stadiums Help Lead the Way Toward Greener Architecture.” May 24, 2018. The New York Times. Retrieved from: https://www.nytimes.com/2018/05/24/climate/sports-stadiumsenvironment.html?login=smartlock&auth=login-smartlock Belson, K. “Water Waste: Going, Going…” Oct. 07, 2014. The New York Times. Retrieved from: https://www.nytimes.com/2014/10/08/business/energy-environment/water-waste-goinggoing-.html Bjerre, T. & Hansen, S.J. “Corporate Tax Credits & Incentives: Denmark” 2019. PricewaterhouseCoopers. Retrieved from: http://taxsummaries.pwc.com/ID/Denmark-Corporate-Tax-credits-andincentives Brown, M. “Why MLB Attendance Dropped Below 70 Million For The First Time In 15 Years” Oct. 03, 2018. Forbes. Retrieved from: https://www.forbes.com/sites/maurybrown/2018/10/03/howmlb-attendance-dropped-below-70-million-for-first-time-in-15-years/#34d887ac61bf Bujak, J. “Heat consumption for preparing domestic hot water in hospitals.” July 2010. Energy and Buildings, 42(7). Pgs 1047-1055. Retrieved from: https://www.sciencedirect.com/science/article/pii/S0378778810000241 CalRecycle. “Financial Resources and Economic Incentives.” 2019. California Department of Resources Recycling and Recovery. Retrieved from: https://www.calrecycle.ca.gov/business/incentives Canada. “Population, Dwellings and Households: Canada 2016 Census.” May 2017. Statistics Canada. Retrieved from: https://stats.gov.nl.ca/Statistics/Census2016/PDF/HOU_OPD%20Char_CanNL_1981-2016.pdf Canadian Institute for Health Information. “CMDB Hospital Beds Staffed and In Operation, 2017-2018” Mar. 21, 2019. Canadian Institute for Health Information. Retrieved from: https://www.cihi.ca/en/access-data-reports/results?f%5B0%5D=field_primary_theme%3A2058 Clukey, K. “New York Passes Its Own Green New Deal With Aggressive Targets.” Jun. 18, 2019. Bloomberg. Retrieved from: https://www.bloomberg.com/news/articles/2019-06-19/new-yorkpassing-its-own-green-new-deal-with-aggressive-targets Collett, S., Samarin, I., Bhalchandra, R., Soundaranayagam, J.R., Garai, S., Chandy, M., & Bhattacharya, S. “Water usage in a multi-speciality hospital and its effective management.” 2016. Journal of the Academy of Clinical Microbiologists. 18(2). Pgs. 135-137. Retrieved from: http://www.jacmjournal.org/article.asp?issn=09721282;year=2016;volume=18;issue=2;spage=135;epage=137;aulast=Collett

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Energy Policies of IEA Countries. “Finland 2018 Review.” 2018. International Energy Agency. Retrieved from: https://www.connaissancedesenergies.org/sites/default/files/pdfactualites/situation_energetique_de_la_finlande.pdf Energy Star. “Hotels: An Overview of Energy Use and Energy Efficiency Opportunities.” 2005. Energy Star. Retrieved from: https://marriott.gcs-web.com/static-files/714c3df2-d8df-4ba9-9653203c2fa74e19 EPA. “Air Emissions Factors and Quantification.” 2019. United States Environmental Protection Agency. Retrieved from: https://www.epa.gov/air-emissions-factors-and-quantification/basicinformation-air-emissions-factors-and-quantification EPA. “Emission Factors for Greenhouse Gas Inventories” Mar. 09, 2018. United States Environmental Protection Agency. Evans, M. “Commercial Water Usage Calculator” Apr. 23, 2019. The Balance. Retrieved from: https://www.thebalancesmb.com/commercial-water-usage-calculator-how-to-do-it-yourself3157816 Export.gov. “United Arab Emirates - Renewable Energy.” Apr. 23, 2018. Export.gov. Retrieved from: https://www.export.gov/article?id=United-Arab-Emirates-Renewable-Energy EY. “Global Sustainability Tax Primer: An Overview of Environmental and Energy Taxes, Sustainability Incentives, and Carbon Regimes.” 2016. Ernst & Young. Retrieved from: https://www.ey.com/Publication/vwLUAssets/EY-global-sustainability-taxes/$FILE/EY-globalsustainability-taxes.pdf EY. “New Zealand’s Tax Working Group recommends Capital Gains Tax” Feb, 21, 2019. Ernst & Young. Retrieved from: https://taxinsights.ey.com/archive/archive-news/new-zealand%E2%80%99stax-working-group-recommends-capital-gains-tax.aspx Fehrenbacher, K. “Goldman Sachs to invest $150 billion in clean energy.” Nov. 02, 2015. Fortune. Retrieved from: http://fortune.com/2015/11/02/goldman-sachs-clean-energy/ Forman, D. & Doyle, J. “Marriott International’s Expanded Portfolio of 30 Leading Hotel Brands Sets New Global Standard for Unrivaled Travel Experiences and Expanded Loyalty Benefits.” Sep. 23, 2016. Marriot International, Inc. Retrieved from: https://news.marriott.com/2016/09/marriottinternational-expanded-loyalty-benefits/ Fortis BC. “Water heating.” 2019. Fortis BC. Retrieved from: https://www.fortisbc.com/services/naturalgas-services/natural-gas-heating-systems-appliances/water-heating Fraile, J. “A boiler room in a 600-bed hospital complex: study, analysis, and implementation of energy efficiency improvements.” 2014. Energies 7(1).

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Johnson, A. “Recycling Energy: An Exploration of Recycling and Embodied Energy.” May 01, 2015. Penn Sustainability Review 1(6). Retrieved from: https://repository.upenn.edu/cgi/viewcontent.cgi?article=1030&context=psr JRAIA. “World Air Conditioner Demand by Region.” April 2018. The Japan Refrigeration and Air Conditioning Industry Association. Retrieved from: https://www.jraia.or.jp/english/World_AC_Demand.pdf Kopun, F. “How neighbourhood malls are struggling to survive.” May 06, 2017. The Toronto Star. Retrieved from: https://www.thestar.com/business/2017/05/06/how-neighbourhood-malls-arestruggling-to-survive.html KPMG. “Tax Facts 2018: A survey of the Norwegian Tax System” March 2018. KPMG. Retrieved from: https://assets.kpmg/content/dam/kpmg/no/pdf/2018/tax-facts-2018-kpmg_interactive.pdf KPMG. “The KPMG Green Tax Index: An exploration of green tax incentives and penalties.” July 2017. KPMG. Retrieved from: https://home.kpmg/content/dam/kpmg/tw/pdf/2017/09/655445_NSS_2017Green_TaxIndex_v 18web.pdf Lee, J. “Delayed Gratification in Energy Savings” 2019. Pinnacle Advisory. Retrieved from: https://pinnacle-advisory.com/press-room/delayed-gratification-in-energy-savings/ Liu, S., Li, Z., & Dai, B. “Energy, Economic and Environmental Analyses of the CO2 Heat Pump System Compared with Boiler Heating System in China.” 2017. Energy Procedia. Retrieved from: http://tiny.cc/9h0u7y Mao, J. & Wang, C. “Tax incentives and environmental protection: evidence from China’s taxpayer-level data” Nov. 09, 2016. China Finance and Economic Review. Retrieved from: https://link.springer.com/article/10.1186/s40589-016-0040-0 Mark, D. “CSIRO report says Australia getting hotter with more to come.” Mar. 04, 2014. ABC. Retrieved from: http://www.abc.net.au/pm/content/2014/s3956656.htm Marriott International, Inc. “Marriott International, Inc. Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.” 2019. United States Securities and Exchange Commission. Retrieved from: https://marriott.gcs-web.com/static-files/714c3df2-d8df-4ba99653-203c2fa74e19 McGowan, M.K. “2019 AHR Expo Elevates Industry’s Innovations.” 2019. ASHRAE. Retrieved from: https://www.ashrae.org/File%20Library/Technical%20Resources/ASHRAE%20Journal/2019Journ alDocuments/Industry%20News/006-025_industry-news_show-wrap-up.pdf Ministry of Economic Affairs and Climate Policy. “Energy Investment Allowance (EIA)” 2019. Netherlands Enterprise Agency. Retrieved from: https://english.rvo.nl/subsidies-programmes/energyinvestment-allowance-eia

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Morgan, G. “Forget dinner and a movie, 'immersive' high-adrenaline adventures catching on with millennials.” Jun. 26, 2015. The Financial Post. Retrieved from: https://business.financialpost.com/entrepreneur/millennial-entrepreneurs-are-creatingimmersive-entertainment-experiences-to-attract-a-younger-demographic Motyka, M. “2019 Renewable Energy Industry Outlook” 2019. Deloitte. Retrieved from: https://www2.deloitte.com/content/dam/Deloitte/us/Documents/energy-resources/usrenewable-energy-outlook-2019.pdf Moreno, T. “State Tax Breaks for Energy” Aug. 25, 2018. The Balance. Retrieved from: https://www.thebalance.com/state-tax-breaks-for-energy-3193337 Muller, J. “How GM Makes $1 Billion A Year By Recycling Waste.” Feb. 21, 2013. Forbes. Retrieved from: https://www.forbes.com/sites/joannmuller/2013/02/21/how-gm-makes-1-billion-a-year-byrecycling-waste/#59af93822309 Myer, R. “The Indoor Man in the White House.” Jan. 13, 2019. The Atlantic. Retrieved from: https://www.theatlantic.com/politics/archive/2019/01/trump-withdraws-parisagreement/579733/ NASA. “World of Change: Global Temperatures” 2019. National Aeronautics and Space Administration. Retrieved from: https://earthobservatory.nasa.gov/world-of-change/DecadalTemp National Energy Board. “What is in a Canadian residential natural gas bill?” 2017. Government of Canada. Retrieved from: https://www.nebone.gc.ca/nrg/sttstc/ntrlgs/rprt/cndnrsdntlntrlgsbll/index-eng.html National Grid. “Managing Energy Costs in Colleges and Universities.” 2003. National Grid: E Source Companies LLC. Retrieved from: https://www9.nationalgridus.com/non_html/shared_energyeff_college.pdf Natural Resources Canada. “Commercial and Institutional Consumption of Energy Survey.” 2007. Government of Canada. Retrieved from: http://oee.nrcan.gc.ca/publications/statistics/cices06/pdf/cices06.pdf Natural Resources Canada. “Directory of Energy Efficiency and Alternative Energy Programs in Canada” 2019. Government of Canada. Retrieved from: http://oee.nrcan.gc.ca/corporate/statistics/neud/dpa/policy_e/programs.cfm Natural Resources Canada. “North American Natural Gas Market: 2015-2015 Heating Season Outlook.” Jul. 25, 2017. Government of Canada. Retrieved from: https://www.nrcan.gc.ca/energy/sources/natural-gas/17894 Newfoundland Power. “Home Comfort: Water Heating.” 2019. Newfoundland Power Inc. Retrieved from: https://www.newfoundlandpower.com/-/media/PDFs/Brochures/EnergyEfficiency/Home-Comfort---Water-Heating.pdf

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NHL Public Relations. “NHL Green month highlighted by 2018 sustainability report.” Mar. 28, 2018. National Hockey League. Retrieved from: https://www.nhl.com/news/nhl-green-2018sustainability-report/c-297374464 NYSERDA. “Governor Cuomo Announces Nearly $8 Million for Two New York Companies as First Commercial and Industrial Carbon Challenge Winners.” Jun. 07, 2019. New York State Energy Research and Development Authority. Retrieved from: https://www.nyserda.ny.gov/About/Newsroom/2019-Announcements/2019-06-07-GovernorCuomo-Announces-Millions-for-Two-New-York-Companies-as-First-Commercial-and-IndustrialCarbon-Challenge-Winners OECD. “Creating market incentives for greener products: policy manual for eastern partnership countries.” 2014. Organisation for Economic Cooperation and Development. Retrieved from: http://www.oecd.org/env/outreach/EN_Policy%20Manual_Creating%20Market%20Incentives% 20for%20Greener%20Products_16%20September.pdf P&S Intelligence. “Heating, Ventilation, and Cooling (HVAC) Market by HVAC Type, by End-User, by Geography – Global Market Size, Share, Development, Growth and Demand Forecast, 2014– 2024” April 2019. Prescient & Strategic Intelligence. Retrieved from: https://www.globenewswire.com/news-release/2019/04/01/1790386/0/en/HVAC-Market-isExpected-to-Reach-136-5-Billion-by-2024-P-S-Intelligence.html Pearce, R. “Paris 2015: Tracking climate pledges.” Sep. 16, 2015. Carbon Brief. Retrieved from: https://www.carbonbrief.org/paris-2015-tracking-country-climate-pledges Proud Green Building. “Extended Stay America invests in lighting upgrades.” Mar. 28, 2016. Proud Green Building. Retrieved from: https://www.proudgreenbuilding.com/articles/extended-stayamerica-invests-1-billion-in-lighting-upgrades/ Rakotondramiarana, H.T., Radanielina, M.H. & Ramananjatovo, A. “Techno-Economic Investigation of a Thermal Cure Center Excess Heat Recovery System for Producing Hot Water for a Hotel in Antsirabe Madagascar” March 2015. Journal of Technology Innovations in Renewable Energy. 4. Pgs. 10-20. Retrieved from: https://www.researchgate.net/figure/Hot-water-consumption-andoccupancy-rate-of-the-hotel-throughout-the-year_fig4_273910722 Roberts, D. “Most American homes are still heated with fossil fuels. It’s time to electrify.” Jul. 02, 2018. Vox. Retrieved from: https://www.vox.com/energy-andenvironment/2018/6/20/17474124/electrification-natural-gas-furnace-heat-pump Roberts, D. “New York just passed the most ambitious climate target in the country.” Jun, 20, 2019. Vox. Retrieved from: https://www.vox.com/energy-and-environment/2019/6/20/18691058/newyork-green-new-deal-climate-change-cuomo Rycroft, M. “Energy usage and efficiency at medical facilities” Apr. 04, 2018. EE Publishers. Retrieved from: https://www.ee.co.za/article/energy-usage-and-efficiency-in-hospitals-clinics-andmedical-facilities.html

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Sanz-Calcedo, J.G., Lopez-Rodriguez, F., Yusaf, T.F., & Al-Kassir, A. “Analysis of the Average Annual Consumption of Water in the Hospitals of Extremadura (Spain)” April 2017. Energies. 10(4). Retrieved from: https://www.researchgate.net/publication/315940766_Analysis_of_the_Average_Annual_Cons umption_of_Water_in_the_Hospitals_of_Extremadura_Spain Schaper, D. “‘Recycling’ Energy Seen Saving Companies Money.” May 22, 2008. National Public Radio, Inc. Retrieved from: https://www.npr.org/templates/story/story.php?storyId=90714692 Silvis, J. “Hospitals Can Tap Into Savings Through Water Conservation” Jan. 15, 2013. Healthcare Design. Retrieved from: https://www.healthcaredesignmagazine.com/architecture/saving-water-savingmoney/ Statista. “National Football League average per game attendance from 2008 to 2018” 2018. Statista. Retrieved from: https://www.statista.com/statistics/249372/average-regular-seasonattendance-in-the-nfl/ Steiner, C. “Gray is the New Green.” Aug. 28, 2008. Forbes. Retrieved from: https://www.forbes.com/forbes/2008/0915/054.html#6c817fca6d66 U.S. Department of Energy. “Quadrennial Technology Review: An Assessment of Energy Technologies and Research Opportunities.” September 2015. U.S. Department of Energy. Retrieved from: https://www.energy.gov/sites/prod/files/2017/03/f34/qtr-2015-chapter5.pdf UNEP Centre. “Global Trends in Renewable Energy Investment 2018” 2018. Frankfurt School of Finance & Management gGmbH. Retrieved from: http://www.iberglobal.com/files/2018/renewable_trends.pdf UNWTO. “UNWTO Tourism Highlights 2018 Edition.” 2018. UNWTO World Tourism Organization. Retrieved from: https://www.e-unwto.org/doi/pdf/10.18111/9789284419876 Vaughan, A. “Swap gas boilers for hydrogen or miss emission targets, UK told.” Nov. 22, 2018. The Guardian. Retrieved from: https://www.theguardian.com/environment/2018/nov/22/ukhydrogen-heating-2050-emissions-targets-gas-boilers-electric-climate-change Wangen, S. & Walby, L. “Corporate Tax Credits & Incentives: Norway” 2019. PricewaterhouseCoopers. Retrieved from: http://taxsummaries.pwc.com/ID/Norway-Corporate-Tax-credits-and-incentives Washington State Department of Health. “Water System Design Manual“ December 2009. Washington State Department of Health: Division of Environmental Health Office of Drinking Water. Retrieved from: https://www.integra-water.com/images/pdfs/Washington-State-Guidlines.pdf World Bank Group. “User Guide for Hospitals: Version 1.0” May 2015. International Finance Corporation: World Bank Group. Retrieved from: https://www.ifc.org/wps/wcm/connect/41942380486c1164aeb9ff299ede9589/150518-00104Hospital+User+Guide-Version+1.pdf?MOD=AJPERES

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10 Appendix 10.1 MARRIOTT RESORT TESTIMONIAL LETTER

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10.2 ANNUAL HOT WATER CONSUMPTION IN BC HOSPITALS ANNUAL HOT WATER CON SUMPTION IN BC HOSPITALS 2017-2018 Liters

Liters

Location

Beds

Low Estimate

High Estimate

Location

Beds

Low Estimate

High Estimate

U.B.C. Health Sciences Centre

1,015

37,047,500

55,571,250

Juan De Fuca Residential Care Hospitals

1,861,500

2,792,250

Vancouver General Hospital

1003

36,609,500

54,914,250

Summerland Memorial Health Centre

1,825,000

2,737,500

Surrey Memorial Hospital

692

25,258,000

37,887,000

Shuswap Lake General Hospital

1,752,000

2,628,000

Holy Family Hospital

552

20,148,000

30,222,000

Hillside Psychiatric Centre

1,715,500

2,573,250

Cowichan District Hospital

487

17,775,500

26,663,250

Fort Nelson General Hospital

1,642,500

2,463,750

Port Mcneill and District Hospital

486

17,739,000

26,608,500

Mcbride and District Hospital

1,606,000

2,409,000

Sechelt Hospital/Shishalh Hospital

455

16,607,500

24,911,250

Chetwynd General Hospital

1,533,000

2,299,500

Royal Columbian Hospital

454

16,571,000

24,856,500

Pleasant Valley Health Centre

1,460,000

2,190,000

Matsqui-Sumas-Abbotsford General Hospital

422

15,403,000

23,104,500

South Hills Tertiary Psych. Rehab Centre

1,460,000

2,190,000

Kelowna General Hospital

420

15,330,000

22,995,000

Cariboo Memorial Hospital

1,350,500

2,025,750

Peace Arch District Hospital

412

15,038,000

22,557,000

Fort St. John General Hospital

1,314,000

1,971,000

Tofino General Hospital

379

13,833,500

20,750,250

Nanaimo Regional General Hospital

1,241,000

1,861,500

Mount Saint Mary Residential Care Hospital

364

13,286,000

19,929,000

Kootenay Lake Hospital

1,204,500

1,806,750

Queen's Park & Fellburn Care Centres

350

12,775,000

19,162,500

Northern Haida Gwaii Hospital and Health Centre

1,022,000

1,533,000

St. Paul's Hospital

336

12,264,000

18,396,000

Ashcroft Hospital and Community Health Care Centre

912,500

1,368,750

Ridge Meadows Hospital and Health Care Centre

319

11,643,500

17,465,250

100 Mile District General Hospital

766,500

1,149,750

Burnaby Hospital

300

10,950,000

16,425,000

Elk Valley Hospital

766,500

1,149,750

Abbotsford Regional Hospital and Cancer Centre

281

10,256,500

15,384,750

R.W. Large Memorial Hospital

766,500

1,149,750

Royal Inland Hospital

274

10,001,000

15,001,500

Victorian Community Health Centre Of Kaslo

730,000

1,095,000

BC Cancer Agency

274

10,001,000

15,001,500

Wrinch Memorial Hospital

693,500

1,040,250

Fraser Canyon Hospital

248

9,052,000

13,578,000

Creston Valley Hospital

657,000

985,500

Mission Memorial Hospital

245

8,942,500

13,413,750

South Okanagan General Hospital

657,000

985,500

Chilliwack General Hospital

231

8,431,500

12,647,250

Prince Rupert Regional Hospital

657,000

985,500

Squamish General Hospital

228

8,322,000

12,483,000

West Coast General Hospital

620,500

930,750

Stuart Lake Hospital

223

8,139,500

12,209,250

Haida Gwaii Hospital and Health Centre

620,500

930,750

Lions Gate Hospital

218

7,957,000

11,935,500

Queen Victoria Hospital

584,000

876,000

GF Strong Centre

207

7,555,500

11,333,250

Powell River General Hospital

547,500

821,250

Queen Alexandra Centre for Children's Health

202

7,373,000

11,059,500

Boundary Hospital

511,000

766,500

Louis Brier EC

201

7,336,500

11,004,750

Chemainus Health Care Centre

511,000

766,500

Lady Minto/Gulf Islands Hospital

200

7,300,000

10,950,000

Port Hardy Hospital

511,000

766,500

Vernon Jubilee Hospital

192

7,008,000

10,512,000

Forensic Psychiatric Services

511,000

766,500

Overlander Extended Care Hospital

189

6,898,500

10,347,750

St. Joseph's General Hospital

438,000

657,000

Children's And Women's Health Centre of BC

181

6,606,500

9,909,750

North Island Hospital, Comox Valley

365,000

547,500 547,500

Penticton Regional Hospital

152

5,548,000

8,322,000

Dawson Creek and District Hospital

365,000

Eagle Ridge Hospital and Health Care Centre

150

5,475,000

8,212,500

The University Hospital of Northern British Columbia

365,000

547,500

Menno Hospital E/C

150

5,475,000

8,212,500

Golden and District Hospital

328,500

492,750 492,750

Delta Hospital

144

5,256,000

7,884,000

Invermere and District Hospital

328,500

St. Michael's Hospital

144

5,256,000

7,884,000

Kitimat General Hospital

328,500

492,750

Saanich Peninsula Hospital

142

5,183,000

7,774,500

Dr. Helmcken Memorial Hospital

292,000

438,000

Cormorant Island Health Centre

140

5,110,000

7,665,000

Lillooet Hospital and Health Centre

292,000

438,000

George Pearson Centre

114

4,161,000

6,241,500

Nicola Valley Hospital and Health Centre

292,000

438,000

Mount St. Joseph Hospital

108

3,942,000

5,913,000

Arrow Lakes Hospital

219,000

328,500

Royal Jubilee Hospital

3,613,500

5,420,250

Princeton General Hospital

219,000

328,500

Richmond Hospital

3,467,500

5,201,250

GR Baker Memorial Hospital

182,500

273,750

East Kootenay Regional Hospital

2,956,500

4,434,750

Bulkley Valley District Hospital

146,000

219,000 219,000

Kootenay Boundary Regional Hospital

2,847,000

4,270,500

Lakes District Hospital and Health Centre

146,000

Campbell River and District General Hospital

2,737,500

4,106,250

Mills Memorial Hospital

146,000

219,000

Bella Coola General Hospital

2,482,000

3,723,000

Mackenzie and District Hospital

109,500

164,250

Langley Memorial Hospital

2,190,000

3,285,000

St. John Hospital

Victoria General Hospital

2,044,000

3,066,000

Total

109,500

164,250

14,901

543,886,500

815,829,750

Sources: Canadian Institute for Health Information (2019); Energy and Buildings (2010).

GREEN MATTERS BUSINESS PLAN

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GREEN MATTERS BUSINESS PLAN