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Autumn 2017 Investor Update

Author:  Nicholas Dimmock BA MBA (CASS), Head of Corporate Finance 350 PPM Ltd.

About 350 PPM

350 PPM Ltd is a corporate finance house, specialising in EIS qualifying, socially responsible / green investments within the environmental sector.

350 PPM Ltd identifies Companies, Projects and Technologies that it believes will benefit substantially from the implementation of The Paris Agreement; the new global treaty to combat climate change and the environmental revolution, which is now fully underway. 350 PPM then structures these opportunities under the UK’s Enterprise Investment Scheme (EIS).

350 PPM then works with, advises and raises finance for the above businesses along the commercialisation runway, to ensure they reach their full potential. The commercialisation runway typically consists of 4 financing stages: Incubation (typically via EIS), Expansion (via EIS), Venture Capital (Pre-IPO via VC’s, Family Offices, Institutional Investors etc), and Listing via 350’s NOMAD Partners.

350 PPM always invests in the companies it champions alongside it’s investment clients. By working closely with the company at every stage and assisting in its growth where possible, 350 PPM can protect its and its investor’s interests, influence the outcome and share in the client company’s potential successes both now and in the future.

Investors can register for further information here: https://350ppm.co.uk/enterprise-investment-scheme/ or via our Crowdfunding Platform here: https://350ppm.envestry.com/.

Businesses, Projects and Technologies looking for funding can register here: https://350ppm.envestry.com/companies/new

Executive Summary

Please find below your Autumn Update from 350 PPM Ltd.

This marks to the end of a particularly intense 9-month period as you would expect from any start up business.

During this time, we have analysed and researched companies within the environmental space, identified the companies, projects and technologies that we believe will profit significantly from The Paris Agreement, approached the relevant companies or they have come to us, negotiated Corporate Finance Agreements with the following companies, namely; Solar 350 Ltd, Disarmco Holdings Ltd, Storelectric Ltd and Social Power Partnerships Ltd, structured Enterprise Investment Scheme Reliefs, created valuation models and raised capital for the underlying businesses.

Our corporate clients have then been able to take significant steps forward, which in turn adds value to their business and creates increases in their valuations, which less the natural dilution, increases their share prices, which of course benefits the investors that invested in them in the first place.

The majority of the personnel and systems we have put in place have worked well. Some haven’t, and we parted, and some systems need improving, all of which are detailed full and frankly in this report.

Most importantly, assuming 350 PPM possesses a reasonable degree of competence in our business arena, is that the sector that we operate in continues to expand rapidly. So while we cannot rest on our laurels (and won’t),  based on the fact that we are simply in the right place at the right time, 350 PPM’s future, marring a few bumps in the road (which we detail in this report), looks very bright.

Most importantly, preparations for The Paris Agreement are fully underway. The rumours we are hearing is that Trump has changed his mind in regard to withdrawing. Whether this  is the case or not is really not that important as the termination period is after the end of Trump’s presidential term and the US is still member of the United Nations Framework Convention on Climate Change Treaty(UNFCCC) anyway, which is the umbrella treaty for all climate change agreements (withdrawing from this was the “Nuclear Option”).

However, one would hope that pressure from his Daughter and a realization, that embracing the  global environmental revolution would be the major economic opportunity he is searching for will influence him to reconsider his decision. From a personal perspective, I would rather not have the Americans involved; its just added competition. I am also quite looking forward to his hotels and properties being flooded, but against this, having America leading the charge would of course quicken the huge global response that is needed.  Three category 5 Hurricane’s in a month against 12 category 5 hurricane’s in the last 25 years, should effect even the most steadfast denier !

Regardless, COP 23 (The Conference of The Parties Number 23)) is due to start in Bonn, Germany on the 6th of November and run through to the 17th. This is the major climate change fighting meeting organised every year by the UNFCCC. Hopefully, a lot of the incentivisation and reporting mechanisms for The Paris Agreement will be formulated and agreed.

Generally, these meetings are for State Leaders, Dignitaries and their entourages, but our own Bill Goldie, Business Development Director of Solar 350 Ltd, has got himself a pass with the Chinese Delegation so we will of course be updating you on any major developments. If you would like to monitor this for yourself, the following links may be useful:

http://climatechange-theneweconomy.com/what-to-expect-from-cop23/

http://newsroom.unfccc.int/cop-23-bonn/

By the way, its actually Fiji’s turn to host the talks, but much to the delegate’s disappointment, Fiji does not really have the resources to do so and so Bonn has become the surrogate.

Regardless, this year, again, we have seen a significant upswing in the environmental sector as detailed by REN21’s Renewables Global Status Report which can be downloaded here:

http://www.ren21.net/gsr2017-now-available/

and REN21’s Renewables Global Futures Report 2017, which can be downloaded here:

http://www.ren21.net/renewables-global-futures-report-2017-now-available/.

Of course, REN’s focus is of course solely renewable energy. According The International Energy Agency (IEA:  http://www.iea.org/Textbase/npsum/ETP2012SUM.pdf) , 46 trillion USD will flow into this area of the environmental revolution between now and 2050.

This leaves $32 trillion of the estimated $78 trillion needed, to be invested in “Carbon Abatement” (measures to reduce carbon pollution non-energy related), “Energy Efficiency” (measures to produce more with less or to save energy) and “Mitigation and Adaptation” (measures taken to co-exist with the effects of climate change – flood defences, guarantees for insurers, mitigation efforts etc).

These different focus points are essentially the 4 Musketeers of The Paris Agreement and The Environmental Revolution: “Carbon Abatement”, “Renewable Energy”, “Energy Efficiency” and “Mitigation and Adaptation” and thus all the businesses that we assist with and work with should fit into this matrix.

The 46 Trillion USD on Renewable Energy according to the International Energy Association with the remaining 32 Trillion USD spread across the other 3 sectors is of coursde only valid, if you believe Lord Stern’s original estimate of the required investment to combat the most serious effects of climate change, namely 2% of global GDP or “2 Trillion USD per year”.

It is however, not all bad; the renewable energy investments are forecast to save 100 Trillion in fossil fuel input costs by 2050, with breakeven somewhere in the middle according to the IEA, energy efficiency will also save money in the long run, and while the technology revolution has eroded jobs, the environmental revolution needs labour and should be hugely GDP positive for the global economy. Strangely, even hurricane damage is GDP positive, so hopefully the environmental revolution can go someway to improve social imbalances in our society.

Nicholas Stern was the Chief Economist at The World Bank and a thought leader on the economics of the subject. You can read more about him here, but he is in short, as Ex Chief Economist of The World, and is probably regarded as the father of the environmental revolution:

https://en.wikipedia.org/wiki/Nicholas_Stern,_Baron_Stern_of_Brentford.

So now onwards with the report in detail covering all the companies we have worked with so far during 2017.

Buyer Beware

350 PPM recently engaged with an individual who was seeking an agreement to become a Director of 350 PPM and join the team with a focus on helping to build the company’s investor client base. Having worked alongside our FCA regulated Principal MJ Hudson Advisers Limited we have put in place rigorous KYC processes to assess any new team members. Unfortunately, in this instance, the individual concerned had gained access to a limited amount of 350 PPM business plans, deal flow and client lists prior to these checks being fully completed.

Based on the findings of the KYC process, we declined to take things any further with this individual and have since completely disengaged with them and removed them from any potential access points to 350 PPM’s confidential files.

The individual in question has since approached certain 350 PPM clients and discussed with investors certain 350 PPM sourced investment deals.

350 PPM has not seen fit at this stage to take any legal action but reserves the right to do so. We would simply flag at this stage to be wary of being approached by any unregulated individual operating in the regulated space of investment advice and investment promotion.

This has instilled in 350 PPM a renewed enthusiasm for strong corporate governance and systems and controls to ensure such issues are recognised and captured at the earlier stages in order to avoid potential issues further down the line.

350 PPM LTD 2.0

We now consider that 350 PPM has finished its first development cycle (getting regulated, starting the business, developing contracts, systems offices etc).

Accordingly, we will be making some changes to the way we work going forward:

Settlements

Each of the four businesses that we have raised for so far has brought their own Accountants with them and this has meant training the accountants up on receiving subscription bundles, checking them for completeness, confirming receipt to the investor, cutting the share certificates, maintaining the share register, reversing trades on exit, putting in the EIS 1 Applications, receiving the EIS 3 applications etc.

Often, as subscription bundles aggregate the accountants sit back and watch in fascination, not too sure how to proceed or participate. Of course this is completely natural. However, this causes delays across the settlement and fulfilment processes and as such, we have decided to handle this ourselves though a central unit. This is not going to happen overnight, but by the time the Tax Year really kicks off at the start of January, we expect to have these systems in place.

Paper and Mail Versus PDFs and Email

We have decided that we will be moving all our communications to email over the next six months.  Regarding this, the software is now relatively straightforward and proven.

The additional advantage is that everything is filed somewhere automatically, which means no more lost share certificates, EIS Certificates, no more issues with moving house and a tightening of the whole process going forward. Accordingly, please keep your emails current on the system. Our email systems automatically updates new emails with what is on our Customer Relationship Management (CRM) systems.

Trust Pilot

350 PPM is also now registering for Trust Pilot. The situation described above in “Buyer Beware” has brought to our attention the plight of many investors that simply choose the wrong company to invest through. This adds an additional outcome to investment scenarios, namely of being scammed.

Many of these companies are superbly presented and very well financed (principally because they have 100% Gross Margin to play with).

Trust Pilot will allow us to level the playing field by providing new investors with a warts and all rating for us. Accordingly, we may request a reference from yourselves electronically in the near future in return for a 350 PPM All Star T Shirt which we are designing now.

Enterprise Investment Scheme

One of the earliest investors in 350 PPM Ltd, who invested around August 2016, before we had even got regulated, has just received his SEIS3 Form from HMRC.

Overall, this is a wait of over 12 months from the date of investment. He is not unhappy about this as the price of 350 PPM based on our internal valuation models has increased significantly.

I am afraid these delays are getting worse as more companies seek to raise finance under the SEIS and EIS. You can see how SEIS/EIS subscriptions have grown on page 6 of this document: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/494624/January_2016_Commentary_EIS_SEIS_Official_Statistics.pdf

I can only estimate that by now there must be over 2 Billion GBP invested in EIS Per year. HMRC’s difficulties of handling this huge increase in volume must also be compounded with continual changes in rules in some industry sectors.

On one hand this is not a bad thing, as enabling tax advisors to structure EIS investments to the extent whereby the investment becomes riskless apart from a potential challenge from HMRC is relatively counterproductive to UK PLC and of course, crowds out the true high growth companies.

You’ll be glad to hear that no more changes are planned for the environmental sector. However, under the hammer for the 5th of November 2017 Pre-Budget report is Film and TV. An excerpt from our EIS Consultants paper on the subject details the likely changes and who they are targeting.

“The sector that is to be most affected is film and television companies, as their structures are seen as providing a “capital preservation” strategy – with pre-sales and film tax credits/rebates also offered, the capital invested in these companies is not seen as “risky” enough to require further tax incentivisation. Furthermore, EIS for film was significant this past year – according to the EIS Association’s statistics, “of the £450 million raised in EIS in 2016/2017, £280 million was in TV and film.”  (A while back, I wrote a blog about the UK film industry titled “SEIS and EIS for Film:  Awakening the force of creativity  as I was impressed by the sector’s growth at the time, so it comes as no surprise to me that HM Treasury sees it as “overheating”.)
Other companies to be affected by the changes are those which appear to be “asset-backed” – i.e. employing SEIS and EIS funds to purchase assets such as their office building or machinery and equipment. For example, engineering companies that require heavy machinery and factory space could be affect”.

If you wish you can read more from Sapphire Capitals (Our EIS Consultant) blog here: https://info.sapphirecapitalpartners.co.uk/blog/upcoming-changes-to-the-enterprise-investment-scheme-rules

This means that for the first time in years, the environmental sector is not being targeted, which of course gives HMRC and Small Companies Enterprise operatives more time to familiarise themselves with the existing rules relevant to our companies.

Please be aware that for each company we champion, we get opinions from Accountants and our EIS Advisors as to their EIS qualification.

Generally, we expect some sort of battle with HMRC / SCEC on every issuance, as it is generally only the most anodynely boring businesses right at the start of their lives that sail through the qualification process.

The rest, get a hard time from HMRC, which is never in a rush to pay out as you can imagine.

Company Updates

Please find below reports from each business we have worked with during the year. The format for these reports are still being defined, but we hope to bed this down into a standard reporting template in time.

Solar 350 Ltd

Historical – Please list 5 historical Achievements:

  • Solar 350 has researched the solar market thoroughly and understands the economic and physical landscapes around the world.
  • Solar 350 has assembled a significant team of engineers, developers and financiers.
  • Solar 350 has developed relationships with partner organisations around the world, in terms of panel providers, inverter suppliers, EPC, construction groups, banks and other finance providers, equity house and other providers of equity finance.
  • Solar 350 has agreements for the development of 1 70 MW project in Chile and a Joint Venture agreement through a jointly owned Chilean company. These projects however, due to the current state of the implementation of the Paris agreement are not a priority.
  • In Mexico, Solar 350 has as of today Land Agreements in place for 600 MW (1500 hectares) of solar parks in Mexico, and has a favorable indicative study for 90 MW as well as Indicative studies for a further 200 MW being submitted shortly. These projects are due to occur in Baja California, Sonora and Chihuahua through 100% owned subsidiaries, namely Solar 350 MX3, Solar 350 MX4 and Solar 350 MX5. An agreement has been reached to sell the first project at shovel ready for 75,000 per MW maintaining a 20% undeletable share of the project company and existing at the point of COD or operational.

Last Quarter –  Please list Achievements in the last quarter:

  • Term Sheet agreed with buyer of first project
  • Formation of Solar 350 MX4 and Solar 350 MX5 through a mechanism that ensured no loss of time and reduced the huge legal and administrative process associated with such formations in Mexico.
  • Finding additional landowners and agreeing basal terms of engagement for an additional 300 MW / 750 Hectare site
  • Gaining Approval of Indicative Study for a 90 MW Project in Baja California. IN reality gain land and the indicative study are roughly 50% of the overall battle in the development and build of any solar power station, especially utility scale ones.

Next Quarter – Please list 5 Milestones you intend to Achieve in the next quarter:

  • By Christmas, our objective is to have full lease agreements and indicative studies approved for 3 * 90-100 MW projects in states of Baja California, Sonora and Chihuahua. These projects will provide us with a toehold in each state which we can expand, targeting full development of 300MW in each state in 2018.
  • To further aggregate potential framework partners which can assist in the build onward sale of the projects as we scale our operations and pipeline.
  • Additional project sites sourced, and framework agreements signed.
  • Agree Term Sheet with 1st buyer for one site as originally agreed verbally.
  • Raise final EIS money.

Next Year – Please list 5 Milestones you intend to Achieve in the next Year:

  • Complete Pre Build Development on at least one project.
  • Complete Sale of this project in structure as agreed verbally: 80% sold, 20% retained.
  • Make preparations with equity and debt suppliers for self build of one project and move to term sheet.
  • Make preparations with EPC and final buyer self build of one project and move to term sheet.
  • Add to pipeline site in Quintina Roos and Yukatan as well as adding project additional project sites in Baja, Sonora and Chihuahua.

Please State Your Ambition for your company:

  • 100 M Plus valuation within 5 years.

Disarmco Holdings Ltd

Update available on request, please contact: Nathanr@350ppm.co.uk

Storelectric Ltd

Over the past month Storelectric has been using the initial investments to leverage its position with a number of key partner companies. The objective of these approaches is to develop long term and mutually beneficial relationships with those companies, rather than just letting a one-off contract. To this end, they have:

  • Initiated a collaboration agreement with a planning and environmental consultancy: Storelectric would benefit from (a) free desk-top “feasibility” reviews of any locations being considered for plants and (b) contacts with their clients who may be interested in a plant. Correspondingly they would benefit from Storelectric’s contacts and from ongoing follow-on work. The wording of this agreement is being finalised.
  • Achieved a similar stage with a similar agreement with a company that offers geotechnical engineering support.
  • Continued discussions with a major land-owner (who also offers both current and potential cavers) with a view to establishing multiple plants.
  • Gained a greater hearing among National Grid, Ofgem and BEIS for the need for storage, and for tweaking their regulatory proposals better to suit large scale storage.

On project-specific work, Storelectric has:

  • Completed the initial environmental studies of the site of the first plant, which is looking very good and not problematical – there was less wildlife than we were expecting!
  • Discussed the initial environmental studies with the local planning authority, receiving excellent and very promising feedback.
  • Agreed a contract for an initial study by a major engineering contractor – this is not yet signed as we’re starting work on a collaboration agreement with them too.
  • Agreed on the initial study to be undertaken by a dynamic modelling company – this will not only validate but also help optimise the plant, increasing its investability, efficiency and therefore returns on investment. This is a major conglomerate who built their modelling system based on their experience both building and operating power stations and other electricity infrastructure.
  • Engaged with further suppliers, to be able to tender the major equipment competitively – that’s one of the many benefits of using off-the-shelf (or very nearly so) equipment in our plant designs, unlike traditional CAES which uses bespoke kit.

The objectives for the next month are to:

  1. Conclude the collaboration agreement with:
    • The planning and environmental consultancy,
    • The geotechnical engineering firm,
    • The engineering contractor (this may stray into the following month as it’s at an earlier stage);
  2. Start environmental surveying for the second plant, and further work on the first, together with a first draft Environmental Impact Assessment and related action plan of the first;
  3. Start the desk-top geotechnical analysis of the first plant (the second is likely to start the following month, depending on the collaboration agreement);
  4. Sign the deals to start work on the initial stages of the first plant, with:
    • The engineering contractor,
    • The dynamic modeller.
  5. Meet potential Middle Eastern investors in the plants;
  6. Meet the Chairman of the All Party Parliamentary Group on Energy Costs with a view to discussing improving regulations still further;
  7. Meet senior members of the Energy Security team of National Grid with a view to giving them a greater appreciation of the inadequacy of their plans and of the need for large scale electricity storage.

Social Power Partnerships (SPP) Ltd

Historical: Please list 5 Achievements Historically:

  • Install of Solar PV on 200 social housing properties, giving us a track record in the industry.
  • Successful first trial of Eco1 Resin.  SPP achieved the UK’s first U-value result for the product 0.47.
  • Developed customers across three target sectors: Housing Associations, charities and community energy groups.
  • Ofgem approval for our prepayment tariff.
  • Completing our first LED project with community group CREW.

Last 30 Days: Please list 5 Achievements in the last 30 days

  • Agreed a trial for Eco1 resin with Tai Tarian housing for Q4 17.
  • Developing a JV with Wolverhampton University to run trials of new technologies in the Black Country. We install and they monitor and report.
  • Arranged a meeting with Good Energy (November 8th) to develop a JV for our product based tariffs concept.
  • Agreed a deal with Pure Leapfrog to manage an energy efficiency upgrade for St Paul’s Trust Birmingham.  Site surveys are ongoing for Solar PV, Eco1 resin, LED lighting and Hydromx heating solution.
  • Delivering London first collective purchase of Solar PV in the borough of Wandsworth.

Next 30 days: Please list 5 Milestones you intend to Achieve in the next 30 days:

  • Get MOU signed with Good Energy, so we can start roll out of products by Jan 18.
  • Reach out to other utilities, to strengthen our hand with Good. Targets are Tonik and Green Energy.
  • Build data lists to start direct marketing to the private landlord sector.
  • Complete the Wandsworth trial of collective solar PV purchase.
  • Get updated and improved U-Value from re-testing of trial site of Eco1 Resin. If our number improves from 0.47 to 0.35 we would be in line with Welsh new building regs.

Next Year: Please list 5 Milestones you intend to Achieve in the next 30 days:

  • Secure funding to develop our business plan targets of expanding staffing and development of a direct marketing strategy.
  • Move towards an MOU with Tai Tarian to develop solar PV on 5000 properties they have lodged with the DNO.
  • Find two new HA’s or LA’s to trial Eco1 resin in the spring of 2018. Current targets are City West and Lister Housing.
  • Build on the Tai Tarian trial of Eco1 resin, to take a share of the 500 homes they plan to insulation refurb in spring 18.
  • Move discussions forward with Enfield Council for Eco1 resin and a trial for Prepay Solar.

Next 5 Years : Please list 5 Milestones you intend to Achieve in the next 30 days:

  • Secure a signed agreement with Good Energy or an alternative supplier.  We see energy services as an essential part of the energy suppliers approach in the coming years. Which could offer SPP our best option of an exit in five years time.
  • Re-testing of Eco1 resin at V2C and new trials with Tai Tarian will provide the data to take the product to a wider market.
  • Funding will allow us buy in with agencies like Community Housing Cymru and the Federation of Scottish Housing Association.  These groups have access to most HA’s in the two countries and can act as a marketing conduit.
  • Agree a Solar PV tariff with Good (or alternative), to allow us to promote the product.
  • Develop a Hydromax based gas tariff with Good.  This will allow us to offer a duel fuel product offering.

Please State Your Ambition for your company:

  • End fuel poverty in the next 10 years.
  • To promote Eco1 Resin to be the preferred choice of insulation for Britain’s solid brick homes and hard to treat properties. Bring production of the chemical to the UK and develop overseas markets.
  • To develop our product based tariffs, to be the number one green energy supply solution in the UK. Greener and cheaper.
  • Transition the business into an electronic platform that will be the first green hub in the UK. We will promote our green tariffs, disruptive technologies like Eco1 resin, offer funding solutions, investment opportunities (green ISA’s), education and installer services.
  • To have a £10m valuation in the next five years.

SPP’s Business Development Strategyment Strategy*

Progress report

SPP has developed a third sector focused customer base, with coverage in three sectors:

  1. Registered Social Landlords (RSL’s)
  2. Charities
  3. Community Energy Groups (CEG’s)

Our clients have come from a combination of direct marketing and industry referrals. We work closely with an energy broker, Utility Aid, with whom we work on a cross referral basis

We are now looking at developing into two new areas: B2C and B2SME.

RSL’s

Social Power has developed a handful of clients through a combination of direct marketing and industry introductions.  Our clients now include V2C Housing, Tai Tarian Housing, Joseph Rowntree Housing Trust and Enfield Council.

Our experience is that these groups make decisions slowly and that they will always err on the side of caution.  To successfully market to this sector we need to address the following issues:

  • Create products RSL’s need.
    • Eco1 resin solves a problem of hard to treat homes.
    • Prepay Solar addresses the issue of increasing credit exposures to residents from solar PV installation investment.
    • Hydromx has the potential to extend boiler life through the transition from gas to renewable heating.
  • Take the work out of their analysis
    • We build all the models that a RSL could require to get a decision made.
  • Funding Support
    • Our funding partner Regenerco offer third party funded solutions.
  • We work closely with Pure Leapfrog and Unity Trust Bank on debt solutions.
  • Get sector buy in
    • Community Housing Cymru and the Federation of Scottish Housing Associations are influencers in Wales and Scotland respectively. We need to align ourselves with these agencies and encourage them to market our products.

Charities

To date SPP has worked with two charities, both animal sanctuaries and both came from referrals. We are currently bidding into an RSPB tender for solar carports.  This relationship came through a direct marketing effort eighteen months ago.

While progress has been slow to date, we believe this sector has huge potential, if we increase our marketing focus on it.  And here is why:

  • The sector is more conscious of its impact on the environment than most.
  • Many charities sit on healthy financial reserves that are either held as cash or in low returning bonds. Returns on Solar PV or LED lighting would offer a vastly improved return on investment.
  • There is potential to offer funding opportunities to their patron bases.
    • They could offer better returns than ISA’s or annuities.
    • Patrons get to act on climate change and help their preferred charity through impact investment.

Our marketing strategy for this sector includes the following:

  • Building social media campaigns around our previous projects and then marketing to other charities in the same field. What works for one animal rescue centre should work for the rest.
  • Work with groups like the Foundation for Social Improvement (FSI) to develop training packages.
  • Sponsor and speak at events like Small Charities Week
  • Target the top 50 UK charities with direct marketing campaigns.

Community Energy Groups

There are over 300 CEGs across Britain.  Their primary focus seems to be on solar PV projects. These are difficult times for the sector. Cuts in the FiT, the abolition of pre-qualification of FiT and the scrapping of SEIS/EIS allowances have all impacted this sector.  Despite this, many groups’ horizons remain firmly fixed on solar PV only.  I have heard people say “I did not know we can do things other than solar”.

We see an opportunity in this sector to educate CEGs on the products we offer and help them develop projects around these technologies.  We work closely with our local group, CREW, and have already delivered one LED project. We are now in the middle of delivering London’s first collective solar PV project with them.

We see the potential to run quarterly campaigns in each community. PV one quarter, insulation another, then Hydromx and finally LED’s.  We would also like to encourage groups to reach out to local businesses to support their progress towards sustainability.

We plan to market our offerings through four central bodies, Community Energy England, Community Energy London, Renew Wales and Community Energy Scotland.  Each group can offer regional coverage to CEGs.

New markets and new approaches

The sectors we have chosen to support are not always the fastest moving, so SPP is looking at new sectors to approach.   This will help our cash flow situation, create turnover for our suppliers and work for our install partners. The latter two will improve the rates at which we purchase goods and services.  We are looking to expand into two areas, B2C and B2SME.

B2C

Working with CEG’s has organically led us into the B2C sector and we plan to accelerate our activities in this area.  We see the following routes to market:

  • Increasing our activity with CEG’s on collective purchase schemes.
  • Offer products through energy supplier partners. Good Energy are keen on this concept.
  • Affiliate programmes with green focused groups, like the Green Party.
  • Acquiring broker lists for direct marketing campaigns. Early adopters, green focused groups and off gas grid addresses are all available content.
  • Strategic advertising. Eco magazines, self-build websites etc.

B2SME

This is a relatively untapped sector and it is only in the last year or two that SME’s have started to consider their CSR profile around climate change.  Investment has been made easier by the availability of EU grants of up to £5k to encourage energy efficiency and renewable generation.

SPP believes the development of our Prepayment Solar tariff and a similar gas tariff built around Hydromx could accelerate the uptake on these products.  We are working closely with Good Energy to develop products for launch early next year.

We see three sectors immediately that would benefit from these tariffs:

  • Light industrial estates that want to improve their green credentials and offer tenants cheaper and greener energy.
  • Retail villages would have similar drivers.
  • Breweries and their chains of pubs.

Another sector that SPP is researching is the private landlord sector.  Environmental regulation will be introduced in 2018 that will stop any F and G EPC rated properties from entering the rental market. 15% of UK properties fall into this bracket.

We plan to target this sector through three avenues:

  • he National Landlords Association (NLA) has 60 000 members and the Residential Landlord Association (RLA) has 30 000 members. We have started initial discussion with them about marketing our products and services.
  • We have identified a broker list of 4000 names that are private landlords. We are now planning a direct marketing campaign.
  • Student housing is potentially an interesting sector. Smart prepay takes the credit risk out of offering facilities, while offering students a green tariff.

Pricing

Below we have detailed the pricing on the shares we have championed from the start of our involvement with each company. These are based on our own internal valuation models. They are of course highly subjective, but detail the price we believe we would be able to buy and sell each share for you today subject to liquidity constraints.

Please note: a number of these company’s have issued a very small number of shares, hence while it is intuitive to assume that a higher share price means a more successful company, this is not the case, as share prices are a function of company valuation divided by the number of shares in issuance.

Tax benefits of SEIS and EIS have not been taken into account.

CompanyShare Price At Start of 350 InvolvementBid

(What we believe you could sell for today)

Offer

(What we believe the company would sell for today)

Solar 350 Ltd£2.5 –£20
Disarmco Holdings Ltd£4.34 –£5
Storelectric Ltd£24.53 –£40
Social Power Partnerships£433 –£485

 

Please note that as yet there are no bids as detailed above. This is because each company is in its private equity / growth phase. We anticipate post Christmas we will have a bid for Solar 350 which will allow those of you have completed your 3 years under the EIS to exit in whole or in part.

Risk Warnings

The value of your investments and the income from them can fall as well as rise. An investor may not get back the amount of money invested. Past performance and forecasts are not reliable indicators of future results. Currency denominated investments are subject to fluctuations in exchange rates that could have a positive or adverse effect on the value of, and income from, the investment. Investors should consult their professional advisers on the possible tax and other consequences of holding such investments.

The opportunities detailed within this website are available for Professional clients (including Elective Professional clients) only. There is no access to the FSCS. Your capital is at risk if you invest. Please see the full Risk Warning here.

Contact Information

Tel: 0203 151 1 350 (Switch Board)

Tel: 0203 151 2 350 (Direct)

Fax: 0203 151 9 350

4th Floor, Victoria House, Victoria Rd, Chelmsford, CM1 1JR (Head Office)
Berkeley Square House, Berkeley Square, London, W1J6BD (Meeting Space)

350 PPM Ltd is an Appointed Representative of M J Hudson Advisers Limited (FRN: 692447) which is authorised and regulated by the Financial Conduct Authority in the UK.

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