ATTRACTIVE INVESTMENT OPPORTUNITY

BIOMASS PELLET PRODUCTION FACILITY IN

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 BASIC INFORMATION PACKAGE CONTENT

I. Key Facts II. Geographic Position III. Production Facility IV. Production Line – Parameters V. Resource of Biomass VI. Serbian Pellet Market VII. Sale Process Overview VIII. Contact Information Appendix KEY FACTS

‹ Production facility independently valued at 2.879.566 EUR as a legal entity

‹ Auction-sale starting price: 890.000 EUR

‹ The production facility is being sold within the bankruptcy proceedings

‹ This project fits into general trend of wider use of renewable sources of energy

‹ Occupancy Permit for the production facility in place

‹ Availability of biomass supply in the given location

‹ Convenient transport connection

‹ Current production capacity: 5T/H

‹ Projected production capacity: 11T/H

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 GEOGRAPHIC POSITION

• BPI’s production facility is located in Doroslovo, municipality, in the Serbian northern province of DOROSLOVO . The production site is a 3-hour drive (180km) from Belgrade SERBIA and 2-hour drive (100km) from , the capital of Vojvodina.

• Facility is conveniently positioned in the vicinity of the EU borders with (25km) and Hungary (28km). The Pan-European transport Corridor X is a 1-hour drive from the production facility.

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 PRODUCTION FACILITY

USABLE AREA, BUILDING CONSTRUCTION YEAR IN SQ.M. • Occupancy permit for the production Production hall 1,784.0 2011-2012 facility in place Silo No. 1 122.0 2011-2012

Silo No. 2 119.0 2011-2012 • The production facility — built in

Scale 107.0 2011-2012 2011/2012 with a total area of production and other space of Shed 87.6 2011-2012 2,326.6sq.m Substation 55.0 2011-2012

Reception 43.0 2011-2012 • Complete utility infrastructure

Water reservoir 9.0 2011-2012 including internal asphalt roads, substation with electricity TOTAL 2,326.6 installations, water and sewerage

LAND AREA, IN SQ.M. network

Agricultural land 108,789.0

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 PRODUCTION FACILITY PHOTOS

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 PRODUCTION LINE - PARAMETERS 25,000 5T/H 11T/H 100,000

ESTIMATED TOTAL CAPEX CURRENT PROJECTED PELLET INVESTMENT PRODUCTION PRODUCTION PRODUCTION TO INCREASE CAPACITY CAPACITY OUTPUT CAPACITY, EUR

• In two years of • Production • Company’s • Estimations are full operations facility output production that with CapEx (2013 – 2014), currently stands facility is investment of pellet production at 5 tons/hour or projected to about EUR totaled approx. 100 tons/day. operate at the 100,000 25,000 tons. hourly capacity production • The production of 11 tons and technology and plant runs on daily capacity of equipment could equipment approx. 260 be upgraded to purchased in tons. the projected 2011. capacity of 11t/h.

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 RESOURCE OF BIOMASS BIOMASS SUPPLY Biomass supply from corn, soy, and their crop residues were secured based on the contract signed with Mr. Robert Holo, a local entrepreneur. Key contractual provisions were as follows:

QUANTITY • The contract provided for the annual supply of biomass in the amount of 100,000 tons. The supply was split into equal monthly deliveries of 20,000 tons over the August-December period. • Estimated need of biomass exceeds 100,000 tons, it is to be purchased from third parties in the open market.

PRICE • The purchase price was approx. EUR 22/t + VAT.

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 SERBIAN PELLET MARKET

PELLET PRODUCTION Total pellet production in Serbia went up from ca. 98,000 tons in 2012 to an estimated ca. 515,000 tons in 2015.

PELLET CONSUMPTION Local pellet consumption in 2015 was forecast to exceed 100,000 tons.

In 2015, a major portion of pellets produced in Serbia was exported (approx. 70%), while the remaining ca. 30% PELLET SALES was sold in the local market to both households and industrial buyers.

Out of approx. 50 active pellet producers across Serbia registered in 2015, a mere 10% had the installed capacity PELLET PRODUCTION of in excess of 4t/h, and 4% operated production facilities with the capacity of over 8t//h. Most pellet producers CAPACITIES ran their production at the capacity of less than 1t/h.

By early 2015, the average export pellet price amounted to EUR 160/t, up from EUR 120/t recorded in 2012. In the local market, the average pellet prices tend to be 5-15% higher than export prices. PELLET PRICES As of January 1, 2017, a lower VAT rate of 10% is applied to the sale of pellets, briquettes, and related biomass products.

The regions of Western, Eastern, and Southern Serbia dominate Serbian pellet production hosting nearly 65% of PELLET PRODUCTION active producers. REGIONS In recent years, Vojvodina, with its agricultural biomass resource base, has emerged as a major pellet production region in Serbia.

¹ SOURCE: REPORT ON WOOD PELLET PRODUCTION AND MARKET STRUCTURE IN SERBIA

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 SALE PROCESS OVERVIEW

ACTIVITY DUE DATE COMMENT

Public announcement of sale of BPI as legal entityin bankruptcy 25.8.2017 Sale method is a public auction

Purchase of sales documentation 11.10.2017 Sales documentation purchase price is RSD 30,000 (ca. EUR 250)

Payment of deposit or submission of bank guarantee 12.10.2017 Deposit amounts to EUR 573.000 EUR

Visit to BPI production facility and assets 11.10.2017 Allowed from date of sales documentationpurchase

Start of auction 16.10.2017 15.15 CET, Agentura Assist, Narodnog fronta 73, Novi Sad

Signing of sales contract TBD

Payment of remaining amount D+30

D - Date of signing of sales contract Auction-sale starting price: 890.000 EUR

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 CONTACT INFORMATION

Karanovic & Nikolic o.a.d.

ADDRESS 23, Resavska St., 11000 Belgrade, Republic of Serbia

PHONE +381(0)11 3094 200

CONTACT Aleksandar Novakovic, Attorney/Senior Associate

E-MAIL [email protected]

Ivan Petrovic, Bankruptcy Administrator

ADDRESS 39, Balzakova St., 21000 Novi Sad, Republic of Serbia

PHONE +381(0)63 538 076

E-MAIL [email protected]

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 APPENDIX

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017 EQUIPMENT INSTALLED

• Production and other equipment dates from 2011

• In addition to production equipment, BPI owns agricultural machinery

• Originally, the pellet line was projected to operate at the hourly capacity of 11 tons, current capacity is 5 tons/hour

• In order to reach projected capacity, investments are required

• Agricultural machinery is available for sale also „piece by piece“ in the second half of October 2017, in two sales independently from the sale of the production facility (detailed information as per your request, see „Contact Information“)

BRIDGE POWER INVESTMENTS, SEPTEMBER 2017