# EDGAR Filing Document

**Accession Number:** 0001848743
**File Stem:** 0001670254-23-000190
**Filing Date:** 2023-3
**Character Count:** 228076
**Document Hash:** 428316a9d68a4e28f173d98802d043d8
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001670254-23-000190.hdr.sgml**: 20230302

**ACCESSION NUMBER**: 0001670254-23-000190

**CONFORMED SUBMISSION TYPE**: C

**PUBLIC DOCUMENT COUNT**: 11

**FILED AS OF DATE**: 20230302

**DATE AS OF CHANGE**: 20230301

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** BlocPower Energy Services 3 LLC
- **CENTRAL INDEX KEY:** 0001848743
- **IRS NUMBER:** 861720713
- **STATE OF INCORPORATION:** DE

**FILING VALUES:**
- **FORM TYPE:** C
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-31910
- **FILM NUMBER:** 23696130

**BUSINESS ADDRESS:**
- **BUSINESS PHONE:** 5182096355

**MAIL ADDRESS:**
- **STREET 1:** 1623 FLATBUSH AVE.
- **STREET 2:** BOC #222
- **CITY:** BROOKLYN
- **STATE:** NY
- **ZIP:** 11210

## Ex-99

### Attached PDF Documents

**Attachment 1:** `document_1.pdf`

# Form C

## Cover Page

Name of issuer:

Blocpower Energy Services 3 LLC

Legal status of issuer:

Form: Limited Liability Company
Jurisdiction of Incorporation/Organization: DE
Date of organization: 1/4/2021

Physical address of issuer:

1623 Flatbush Ave
Boc #222
Brooklyn NY 11210

Website of issuer:

http://bpes3.blocpower.io

Name of intermediary through which the offering will be conducted:

Wefunder Portal LLC

CIK number of intermediary:

0001670254

SEC file number of intermediary:

007-00033

CRD number, if applicable, of intermediary:

283503

Amount of compensation to be paid to the intermediary, whether as a dollar amount or a percentage of the offering amount, or a good faith estimate if the exact amount is not available at the time of the filing, for conducting the offering, including the amount of referral and any other fees associated with the offering:

5.0% of the offering amount upon a successful fundraise, and be entitled to reimbursement for out-of-pocket third party expenses it pays or incurs on behalf of the Issuer in connection with the offering.

Any other direct or indirect interest in the issuer held by the intermediary, or any arrangement for the intermediary to acquire such an interest:

No

Type of security offered:

☐ Common Stock
☐ Preferred Stock
☑ Debt
☐ Other

If Other, describe the security offered:

Target number of securities to be offered:

50,000

Price:

$1.00000

Method for determining price:

Pro-rated portion of the total principal value of $50,000; interests will be sold in increments of $1.

Target offering amount:

$50,000.00

Oversubscriptions accepted:

☑ Yes
☐ No

If yes, disclose how oversubscriptions will be allocated:

☐ Pro-rata basis

☐ First-come, first-served basis

☑ Other

If other, describe how oversubscriptions will be allocated:

As determined by the issuer

Maximum offering amount (if different from target offering amount):

$3,150,000.00

Deadline to reach the target offering amount:

4/30/2023

NOTE: If the sum of the investment commitments does not equal or exceed the target offering amount at the offering deadline, no securities will be sold in the offering. Investment commitments will be cancelled and committed funds will be returned.

Current number of employees:

2

|  | Most recent fiscal year-end: | Prior fiscal year-end: |
| --- | --- | --- |
| Total Assets: | $4,391,754.00 | $0.00 |
| Cash & Cash Equivalents: | $351,984.00 | $0.00 |
| Accounts Receivable: | $374,985.00 | $0.00 |
| Short-term Debt: | $315,254.00 | $0.00 |
| Long-term Debt: | $3,664,949.00 | $0.00 |
| Revenues/Sales: | $96,714.00 | $0.00 |
| Cost of Goods Sold: | $0.00 | $0.00 |
| Taxes Paid: | $0.00 | $0.00 |
| Net Income: | ($65,427.00) | $0.00 |

Select the jurisdictions in which the issuer intends to offer the securities:

AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, TX, UT, VT, VA, WA, WV, WI, WY, BS, GU, PR, VI, IV

# Offering Statement

Respond to each question in each paragraph of this part. Set forth each question and any notes, but not any instructions thereto, in their entirety. If disclosure in response to any question is responsive to one or more other questions, it is not necessary to repeat the disclosure. If a question or series of questions is inapplicable or the response is available elsewhere in the Form, either state that it is inapplicable, include a cross-reference to the responsive disclosure, or omit the question or series of questions.

Be very careful and precise in answering all questions. Give full and complete answers so that they are not misleading under the circumstances involved. Do not discuss any future performance or other anticipated event unless you have a reasonable basis to believe that it will actually occur within the foreseeable future. If any answer requiring significant information is materially inaccurate, incomplete or misleading, the Company, its management and principal shareholders may be liable to investors based on that information.

# THE COMPANY

1. Name of Issuer:

Blocpower Energy Services 3 LLC

# COMPANY ELIGIBILITY

2. ☑ Check this box to certify that all of the following statements are true for the issuer.

- Organized under, and subject to, the laws of a State or territory of the United States or the District of Columbia.
- Not subject to the requirement to file reports pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934.
- Not an investment company registered or required to be registered under the Investment Company Act of 1940.
- Not ineligible to rely on this exemption under Section 4(a)(6) of the Securities Act as a result of a disqualification specified in Rule 503(a) of Regulation Crowdfunding.
- Has filed with the Commission and provided to investors, to the extent required, the ongoing annual reports required by Regulation Crowdfunding during the two years immediately preceding the filing of this offering statement (or for such shorter period that the issuer was required to file such reports).

Not a development class, company that (a) has no specific business plan or (b) has

• Not a development stage company that (a) has no specific business plan or (b) has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies.

INSTRUCTION TO QUESTION 2: If any of these statements are not true, then you are NOT eligible to rely on this exemption under Section 4(a)(6) of the Securities Act.

3. Has the issuer or any of its predecessors previously failed to comply with the ongoing reporting requirements of Rule 202 of Regulation Crowdfunding?

☐ Yes ☑ No

# DIRECTORS OF THE COMPANY

4. Provide the following information about each director (and any persons occupying a similar status or performing a similar function) of the issuer.

| Director | Principal Occupation | Main Employer | Year Joined as Director |
| --- | --- | --- | --- |
| Donnel A. Baird | CEO | BlocPower | 2021 |

For three years of business experience, refer to Appendix D: Director & Officer Work History.

# OFFICERS OF THE COMPANY

5. Provide the following information about each officer (and any persons occupying a similar status or performing a similar function) of the issuer.

| Officer | Positions Held | Year Joined |
| --- | --- | --- |
| Cullen Kasunic | Chief Project Finance Officer | 2019 |
| Donnel A. Baird | CEO | 2021 |
| Donnel A. Baird | Founder | 2021 |

For three years of business experience, refer to Appendix D: Director & Officer Work History.

INSTRUCTION TO QUESTION 5: For purposes of this Question 5, the term officer means a president, vice president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer, and any person that routinely performing similar functions.

# PRINCIPAL SECURITY HOLDERS

6. Provide the name and ownership level of each person, as of the most recent practicable date, who is the beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power.

| Name of Holder | No. and Class of Securities Now Held | % of Voting Power Prior to Offering |
| --- | --- | --- |
| BlocPower LLC | Membership Interests | 100.0 |

INSTRUCTION TO QUESTION 6: The above information must be provided as of a date that is no more than 120 days prior to the date of filing of this offering statement.

To calculate total voting power, include all securities for which the person directly or indirectly has or shares the voting power which includes the power to vote or to direct the voting of such securities. If the person has the right to acquire voting power of such securities within 60 days, including through the exercise of any option, warrant or right, the conversion of a security, or other arrangement, or if securities are held by a member of the family, through corporations or partnerships, or otherwise in a manner that would allow a person to direct or control the voting of the securities (or share in each direction or context ... as, for example, a co-contractor) they should be included as being "beneficially owned." You should include an explanation of these circumstances in a footnote to the "Number of and Class of Securities Now Held." To calculate outstanding voting equity securities, assume all outstanding options are exercised and all outstanding convertible securities converted.

# BUSINESS AND ANTICIPATED BUSINESS PLAN

7. Describe in detail the business of the issuer and the anticipated business plan of the issuer.

For a description of our business and our business plan, please refer to the attached Appendix A, Business Description & Plan.

INSTRUCTION TO QUESTION 7: Wefunder will provide your company's Wefunder profile as an appendix (Appendix A) to the Form C in PDF format. The submission will include all Q&A items and "read more" links to an un-collared format. All videos will be transcribed.

This means that any information provided in your Wefunder profile will be provided to the SEC in response to this question. As a result, your company will be potentially liable for misstatements and omissions in your profile under the Securities Act of 1933, which requires you to provide material information related to your business and anticipated business plan. Please review your Wefunder profile carefully to ensure it provides all material information, is not false or misleading, and does not omit any information that would cause the information included to be false or misleading.

# RISK FACTORS

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment.

In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document.

**The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature.**

**These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.**

8. Discuss the material factors that make an investment in the issuer speculative or risky.

A crowdfunding investment involves risk. You should not invest any funds in this offering unless you can afford to lose your entire investment. In making an investment decision, investors must rely on their own examination of the issuer and the terms of the offering, including the merits and risks involved. These securities have not been recommended or approved by any federal or state securities commission or regulatory authority. Furthermore, these authorities have not passed upon the accuracy or adequacy of this document. The U.S. Securities and Exchange Commission does not pass upon the merits of any securities offered or the terms of the offering, nor does it pass upon the accuracy or completeness of any offering document or literature. These securities are offered under an exemption from registration; however, the U.S. Securities and Exchange Commission has not made an independent determination that these securities are exempt from registration.

There is a risk that the customers fail to make payments to the Company and default under the leases. Although the Company has the right to remove equipment from a building upon a customer's default under the lease, some of the equipment is dwelt to remove and still retains residual value (i.e. insulation) which results in limited or no cash recoupment from the equipment which proceeds would be used to pay the investors. Also, given the importance of heat pumps, the Company may not want to remove them from the property. This could impact accounts receivable and the cash available to repay investors.

The Company asset size and project numbers will be small initially, at least for the near term future, and thus carry a lack of diversification risk. The more projects and sources of revenue as the Company adds more projects and funding in the future, the less dependent the Company is on any particular project to ensure it can meet its financing obligations.

The Company could experience unforeseen contractor/supplier issues such as lack of resources, delay in materials from manufacturers, inability to access building properties, especially as a result of the COVID-19 pandemic. The Company could then experience delays in their ability to meet targeted commercial operation dates and monthly lease payments from building customers.

Accounts receivables could be lower than expected and impact the Company's ability to pay investors.

The Company and its Business (defined below) are continuing to be developed, in part, with the proceeds of the Offering. The Company, which was organized in January 2021, has just begun to generate revenue. The revenue-generating customer lease payments for funds raised have yet to be deployed. The likelihood of its success should be considered in light of the problems, expenses, difficulties, complications, and delays usually encountered by companies in their early stages of development; however, the Company will benefit from its parent's, BlocPower, eight years of operational history and know-how. The Company may not be successful in attaining the objectives necessary for it to overcome these risks and uncertainties.

There is the possibility that a natural disaster or other events beyond the control of the Company could cause damage to the equipment. This would be especially devastating as we are regionally concentrated in New York. This may cause unexpected replacement costs and negatively impact financial returns. While the equipment is covered by a number of insurance policies, including an inland marine insurance policy during the construction period, and under the customer's property insurance during the operating term, both to cover replacement costs for potential damage, all possible damage may or may not be covered by the insurance company or the insurance coverage may not be adequate.

The Company is subject to legislation and regulation at potentially all levels of government - federal, state, and local. Regulations are continually being reviewed and we expect that court actions and regulatory proceedings could change the Company's obligations under applicable federal, state, and local laws, which cannot be predicted.

The Company greatly benefits and expects to continue to benefit from federal/state/local incentives that serve to significantly reduce the costs to construct and run projects. While the initial set of projects coming out of this raise should not be impacted given how quickly they will be implemented, changes to incentives could impact the overall sector growth and BlocPower's business.

With all technology, there is a possibility of having unexpected software or hardware failures. If this occurs, it would require repair or replacement. This would inhibit the operation until repaired or replaced, and create an additional

cost burden to the Company, if not covered by warranty at the time reducing the profit margin for the investors. The Company in many cases guarantees that systems will operate for customers, and in these cases, holds ultimate responsibility for maintenance and functional status of these systems. While the Company does utilize to the extent possible long term manufacturer warranties, installer warranties, third party maintenance contracts, and insurance policies of various types, there is no guarantee these will cover the full range of possible failures of or damages to the systems.

We depend on energy efficiency and renewable energy contractors and subcontractors to assess and install energy efficiency solutions, and maintain performance in certain cases over the life of the contract, typically a 15 year period. Our ability to meet obligations to customers and partners may be adversely affected if suppliers or subcontractors do not perform the agreed-upon services in compliance with customer requirements and in a timely and cost-effective manner. Our suppliers may be less likely than us to be able to quickly recover from natural disasters and other events beyond their control and may be subject to additional risks such as financial problems that limit their ability to conduct their operations. The risk of these adverse effects may be greater in circumstances where we rely on only one or more subcontractors.

While the Company has identified projects to finance, the Company has discretion to make changes to this list and can add additional projects if the maximum amount is raised. While the Company has a well developed Underwriting process and intends to select similar projects in building customer profiles as the projects listed, there is a risk that these projects may have unforeseen issues that will negatively impact the lease payments.

There is a risk that the Company won't be able to identify alternative projects to include due to competition or other reasons, and the total revenues from lease payments will be reduced which may impact the company's ability to pay its debt obligations. The Company has the right to add new lines of business and new projects in the future. The risks associated with those are unknown, and could result in negative impact to the ability of the Company to pay its debts. The Company focuses on projects for single family homes which may take additional customer assistance in order to move to contract, small multifamily (generally 2-4 units), and medium to larger multifamily units (4+) outside the state of New York, which is where BlocPower has deeper contractor relationships.

The loans made to BlocPower LLC for temporary construction loans and sponsor equity into other project companies is unsecured and subordinate to all other debt obligations of BlocPower LLC. This increases the risk that those loans would not get repaid.

The success of the Company can be impacted by general economic conditions - adverse economic conditions could impact the Company's ability to collect lease payments and the Company's ability to find quality projects should the Company need to substitute projects in the future.

COVID-19 may impact the Company's ability to complete projects on a timely basis. Contractors and access to building premises could experience delays or additional unexpected expenses. Building owners may experience unexpected financial difficulties given unemployment rates and illness amongst tenants and thus default on or delay their lease payments which in turn would impact the Company's ability to meet its debt obligations. Property owners in certain impacted industries may lose their jobs or remain unemployed, which could impact their ability to make financing payments.

Some site visits do continue. While BlocPower has developed a COVID-19 protocol and methodology to keep employees, contractors, community members, and building residents safe during the onsite assessment and installation phase of clean energy projects, there are no guarantees that the Company's efforts will be successful.

In order to achieve the Company's near and long-term goals, the Company may need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future, we may not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause an investor to lose all or a portion of his or her investment.

The lease payments may not exactly match the Company's obligations under the Notes thus leaving the Company without the cash flow to pay Note obligations. The projects also are relying on money back from incentives to maximize projects developed and there is always a risk that there is a delay in receiving the incentives back in a timely manner. The Company must ensure they manage the potential for cash flow mismatch by maintaining cash reserves and debt service coverage.

The energy efficient industry is an emerging market that is constantly evolving and may not develop to the size or at the rate we expect. It may take several years to fully develop and mature, and we cannot be certain that the market will grow to the size or at the rate we expect. Any future growth of the market and the success of our service offerings depend on many factors beyond our control, including recognition and acceptance of the energy efficient upgrades by consumers, the pricing of alternative sources of energy, a favorable condition

consumers, the pricing of alternative sources of energy, a favorable regulatory environment, the continuation of expected tax benefits and other incentives, and our ability to provide cost-effective service offerings. If the market is not widely accepted, it may affect our ability to receive funding. If there were declining macroeconomic conditions (i.e. job markets and residential real estate markets), this could impact customer's financial viability and credit to enter into long-term contracts, even if such contracts would generate immediate and long-term savings.

With fixed income securities (such as the Notes), there is a promise by the Company to pay you interest and your principal investment back in the future (pursuant to the applicable terms and conditions of such security). The amounts payable on the Notes are fixed amounts. Unlike an equity investment, a Noteholder does not have the ability to participate in the upside potential that an equity investor does if the Company is very successful.

There is no guarantee that the Company will be able to make the fixed amounts payable to a Noteholder or for that matter pay other liabilities. If the Company should default on a scheduled payment, goes into bankruptcy, becomes insolvent, or otherwise is unable to pay its debts as they become due, then the Company may not be able to satisfy its payment obligations under the Note, and an investor may therefore either suffer a loss of their investment or not realize their anticipated return on their investment.

The notes are not secured by specific collateral; that is, the Noteholder has no special rights to the assets of the Company in order to reclaim their investment. Rather, in a bankruptcy scenario, the Noteholders rely on a trustee to sell the assets and pay the Noteholder with the proceeds of the assets. The Company will not pledge any of its assets to other creditors, so no other creditors will have rights to its assets ahead of the Noteholders.

The loans made to BlocPower LLC for temporary construction loans and sponsor equity into projects owned and operated in other subsidiary companies, or direct equity investments into BlocPower LLC subsidiaries are unsecured and will be subordinate to all other debt obligations of BlocPower LLC and/or the subsidiary. The Company can invest up to 40% of cash raised from Noteholders in this manner. While the Parent Company has the option to cover any shortfalls if needed, these investments being unsecured and subordinated increase the risk that Noteholders will not get paid in a timely manner, or may lose their investment.

For investments that take an equity position, there is no obligation of the BlocPower Project Cos to pay dividends up to pay their equity investors and must pay all other obligations of that company first, thus further increasing the risk that cash will not be repaid to the Company.

While the Company believes that the interest rate on the Notes is generally reflective of market terms for an investment of this nature, there is currently a very limited market of comparable offerings to reference. Unlike listed companies that are valued publicly through market-driven trading, the valuation of securities of private companies, especially startups or in early stages, is difficult.

Interest rates fluctuate over time and may go up or go down. If interest rates go up (for example from 6.5% to 7.5% for a similar investment) in the future, your investment will maintain its original lower coupon rate. Subject to any applicable restrictions on the transfer of such Notes, if an investor desires to sell their Notes to someone else, a third-party, such third-party may require a discount from your, the investor's, original investment amount, which would cause them to potentially realize a loss on their investment.

Volatility in interest rates may come from a wide variety of factors and can be very difficult to forecast. For example, rate moves may come from fundamental factors such as central bank announcements related to monetary policy due to inflation concerns and economic growth. Another example impacting interest rates can be geopolitical risk and shocks to the equity markets. Uncertainty in global and financial markets can have a negative impact on interest rates, and demand for securities that themselves are more risky inherently.

The Notes, at the option of the Company, can be repaid at any time. The Company is obligated to give Note Holders their remaining principal investment back plus any interest that is accrued up to the call date; in return for this option, the Company has also promised to pay Noteholders a penalty for prepaying early. See the Optional Prepayment section. However, when you go to reinvest your money, current interest rates may be lower, and if so your new investment would carry a lower interest rate which may not be compensated fully by the extra cash you get from the prepayment penalty.

Limitations on recourse: There is no guarantee of repayment, or recourse for the note holders against the Company

Investors will not receive any notice of default, material changes, or other problems with the Company, construction or operation of the Project. There are no provisions for investors to collectively agree to new terms with respect to the Notes or restructure or reschedule amounts due on the Notes.

There are no provisions for investors to collectively pursue repayment of the Notes. There are no provisions for investors to communicate with each other or take any collective action.

There is no public market for, and the investor may be unable to sell, the Notes. The Company's offer and sale of the Notes will not be registered under the Securities Act or under any state securities laws. No transfer of the Notes may be made unless the transfer is registered under the Securities Act and applicable state securities laws, or an exemption is available. As a precondition to the effectiveness of any such transfer, the Company may require the transferor to provide it with an opinion of legal counsel stating that the transfer is legal and to pay any costs the Company incurs in connection with the transfer.

Investments in startups and early-stage ventures are speculative and these enterprises can fail. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. You should be able to afford and be prepared to lose your entire investment.

Pursuant to state and federal securities laws, you will be limited in your ability to resell your investment for the first year and may need to hold your investment for an indefinite period of time.

Unlike investing in companies listed on a stock exchange where you can quickly and easily trade securities on a market, you may have to locate an interested buyer when you do seek to resell your crowdfunded investment.

The Company may disclose only limited information about the Company, its business plan, the offering, and its anticipated use of proceeds, among other things.

An early-stage company may be able to provide only limited information about its business plan and operations because it may not have fully developed operations or a long history to provide more disclosure. The Company is also only obligated to file information annually regarding its business, including financial statements, and certain companies may not be required to provide annual reports after the first 12 months.

A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events-continuing disclosure that you can use to evaluate the status of your investment. In contrast, you may have only limited continuing disclosure about your crowdfunding investment

An early-stage investment is also an investment in the entrepreneur or management of the Company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should also be aware that a portion of your investment may fund the compensation of the company's employees, including its management. You should carefully review any disclosure regarding the company's use of proceeds.

As with other investments, there is no guarantee that crowdfunding investments will be immune from fraud.

Our future success depends on the efforts of a small management team. The loss of services of the members of the management team may have an adverse effect on the company. There can be no assurance that we will be successful in attracting and retaining other personnel we require to successfully grow our business.

INSTRUCTION TO QUESTION 9: Avoid generalized statements and include only those factors that are unique to the issuer. Discussion should be tailored to the issuer's business and the offering and should not repeat the factors addressed in the legends set forth above. No specific number of risk factors is required to be identified.

# The Offering

## USE OF FUNDS

9. What is the purpose of this offering?

The Company intends to use the net proceeds of this offering for working capital and general corporate purposes, which includes the specific items listed in Item 10 below. While the Company expects to use the net proceeds from the Offering in the manner described above, it cannot specify with certainty the particular uses of the net proceeds that it will receive from this Offering. Accordingly, the Company will have broad discretion in using these proceeds.

10. How does the issuer intend to use the proceeds of this offering?

If we raise: $50,000

Use of 5% to Wefunder Fees, 4% to legal, 2.5% to accounting with remaining 88.5% to BlocPower Projects (scoping and designing each project, equipment and installation costs)

If we raise: $3,150,000

Use of 5% to Wefunder Fees, 1% to legal, 1.5% to accounting with remaining 92.5% to BlocPower Projects (scoping and designing each project

equipment and installation costs)

INSTRUCTION TO QUESTION 10: An issuer must provide a reasonably detailed description of any intended use of proceeds, such that investors are provided with an adequate amount of information to understand how the offering proceeds will be used. If an issuer has identified a range of possible uses, the issuer should identify and describe such probable use and the factors the issuer may consider in allocating proceeds among the potential uses. If the issuer will accept proceeds in excess of the target offering amount, the issuer must describe the purpose, method for allocating overadecceptions, and intended use of the excess proceeds with similar specificity. Please include all potential uses of the proceeds of the offering, including any that may apply only to the case of overadecceptions. If you do not do so, you may later be required to amend your Form C. Wefunder is not responsible for any failure by you to describe a potential use of offering proceeds.

## DELIVERY & CANCELLATIONS

11. How will the issuer complete the transaction and deliver securities to the investors?

If we reach our target offering amount prior to the deadline, we may conduct an initial closing of the offering early if we provide notice about the new offering deadline at least five business days prior to the new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment). Wefunder will notify investors if we conduct an initial closing. Thereafter, we may conduct additional closings from time to time at our and Wefunder's discretion until the deadline date.

The following describes the process to invest in the Company, including how the Company will complete an Investor's transaction and deliver securities to the investor.

Investor Commitment. The Investor will submit, through Wefunder Portal, a requested investment amount. When doing so, the Investor will also execute an investment contract with the Company ("Investment Agreement"), using the Investor's electronic signature.

Acceptance of the Investment. If the Investor Agreement is complete, the Investor's commitment will typically be recorded within a few minutes. The commitment will also be available on the Investor's "My Investments" screen on the wefunder.com website. After the offering closes, the contract will be countersigned by the Company. The executed investment contract will then be sent to the investor via email, and is also available to download on the "My Investments" screen.

Investor Transfer of Funds. Upon receiving confirmation that an investment has been accepted, the Investor will be responsible for transferring funds from a source that is accepted by Wefunder Portal into an escrow account held with a third party bank on behalf of issuers offering securities through Wefunder Portal.

Progress of the Offering. The Investor will receive periodic email updates on the progress of the offering, including total amounts raised at any given time, and will be notified by email and through the "My Investments" screen when the target offering amount is met.

Closing: Original Deadline. Unless we meet the target offering amount early, Investor funds will be transferred from the escrow account to the Company on the deadline date identified in the Cover Page to this Form C and the Company's Wefunder Portal Profile.

Early Closings. If the target offering amount is met prior to the original deadline date, we may close the offering earlier, but no less than 21 days after the date on which information about the Company, including this Form C, is posted on our Wefunder Portal Profile. We will reschedule the offering deadline, and at least five days prior to the new deadline, investors will receive notice of it by email and through the "My Investments" screen. At the time of the new deadline, your funds will be transferred to the Company from the escrow account, provided that the target offering amount is still met after any cancellations.

Book Entry. Investments may be in book entry form. This means that the Investor may not receive a certificate representing his or her investment. Each investment will be recorded in our books and records and will be recorded in each Investors' "My Investments" screen. The Investor will also be emailed the Investment Agreement again. The Investment Agreement will also be available on the "My Investments" screen. At the option of the Company, you may receive an electronic certificate.

12. How can an investor cancel an investment commitment?

NOTE: Investors may cancel an investment commitment until 48 hours prior to the deadline identified in these offering materials.

The intermediary will notify investors when the target offering amount has been met. If the issuer reaches the target offering amount prior to the deadline identified in the offering materials, it may close the offering early if it provides notice about the new offering deadline at least five business days prior to such new offering deadline (absent a material change that would require an extension of the offering and reconfirmation of the investment commitment).

If an investor does not cancel an investment commitment before the 48-hour period prior to the offering deadline, the funds will be released to the issuer upon closing of the offering and the investor will receive securities in exchange for his or her investment

If an investor does not reconfirm his or her investment commitment after a material change is made to the offering, the investor's investment commitment will be cancelled and the committed funds will be returned.

An Investor's right to cancel. An investor may cancel his or her investment commitment at any time until 48 hours prior to the offering deadline.

If there is a material change to the terms of the offering or the information provided to the investor about the offering and/or the Company, the investor will be provided notice of the change and must re-confirm his or her investment commitment within five business days of receipt of the notice. If the investor does not reconfirm, he or she will receive notifications disclosing that the commitment was cancelled, the reason for the cancellation, and the refund amount that the investor is required to receive. If a material change occurs within five business days of the maximum number of days the offering is to remain open, the offering will be extended to allow for a period of five business days for the investor to reconfirm.

If the investor cancels his or her investment commitment during the period when cancellation is permissible, or does not reconfirm a commitment in the case of a material change to the investment, or the offering does not close, all of the investor's funds will be returned within five business days.

Within five business days of cancellation of an offering by the Company, the Company will give each investor notification of the cancellation, disclose the reason for the cancellation, identify the refund amount the investor will receive, and refund the investor's funds.

The Company's right to cancel. The Investment Agreement you will execute with us provides the Company the right to cancel for any reason before the offering deadline.

If the sum of the investment commitments from all investors does not equal or exceed the target offering amount at the time of the offering deadline, no securities will be sold in the offering, investment commitments will be cancelled and committed funds will be returned.

## Ownership and Capital Structure

### THE OFFERING

13. Describe the terms of the securities being offered.

The company is issuing promissory notes to investors. Each note will accrue interest at a rate of 6.5% (non-compounding, calculated on the basis of a 365-day year and the actual number of days elapsed) and the company will make interest payments to the investor annually, starting one year after [the closing date of the offering]. Each note will have the maturity date specified in the note. The company will pay the outstanding principal amount of each note and all unpaid accrued interest on the maturity date. The company may prepay principal and interest at any time.

The notes are not secured or guaranteed by anyone at the Company.

Events of Default: The occurrence of any of the following events shall constitute an event of default in the Notes (an "Event of Default"): (i) the Company is past due on payment of principal or interest for a period of five (5) days or more (ii) the Company has breached a covenant and failed to cure such breach in thirty (30) days; (iii) any representation or warranty of the Company was untrue when made (iv) the Company is adjudicated bankrupt or insolvent under the federal bankruptcy laws or any similar jurisdiction; or (v) the Company has instituted proceedings to be adjudicated as a voluntary bankruptcy or file a petition seeking reorganization or an arrangement with creditors under the federal bankruptcy laws, or any similar applicable federal or state law, or shall make an assignment for the benefit of creditors. Upon the occurrence of an Event of Default, any Holder may, by written notice to the Company, declare the unpaid principal amount of their Notes, and interest accrued thereon, to be due and payable.

Remedies upon Default: Upon the occurrence and during the continuance of an Event of Default, Holders may petition the Company for the Notes to become due and payable immediately. If the Company receives such petitions from Holders owning more than 30% of the outstanding principal of the Notes, Company shall pay all outstanding principal and interest on the Notes without further demand. Upon the occurrence and during the continuance of an Event of Default, interest will accrue at 7.5%.

The notes do not provide investors with any voting rights in the company.

The form of the notes is provided in Appendix B, Investor Contracts. The form of the notes is Appendix B, Investor Contracts.

14. Do the securities offered have voting rights?

☐ Yes

☐ no

15. Are there any limitations on any voting or other rights identified above?

☑ Yes: No Voting Rights
☐ No:

16. How may the terms of the securities being offered be modified?

The terms of the notes cannot be amended.

# RESTRICTIONS ON TRANSFER OF THE SECURITIES BEING OFFERED:

The securities being offered may not be transferred by any purchaser of such securities during the one year period beginning when the securities were issued, unless such securities are transferred:

1. to the issuer;
2. to an accredited investor;
3. as part of an offering registered with the U.S. Securities and Exchange Commission; or
4. to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.

NOTE: The term "accredited investor" means any person who comes within any of the categories set forth in Rule 501(a) of Regulation D, or who the seller reasonably believes comes within any of such categories, at the time of the sale of the securities to that person.

The term "member of the family of the purchaser or the equivalent" includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the purchaser, and includes adoptive relationships. The term "spousal equivalent" means a cohabitant occupying a relationship generally equivalent to that of a spouse.

# DESCRIPTION OF ISSUER'S SECURITIES

17. What other securities or classes of securities of the issuer are outstanding? Describe the material terms of any other outstanding securities or classes of securities of the issuer.

| Class of Security | Securities (or Amount) Authorized | Securities (or Amount) Outstanding | Voting Rights |
| --- | --- | --- | --- |
| This is an LLC with no issued units. |  |  |  |

| Class of Security | Securities Reserved for Issuance upon Exercise or Conversion |
| --- | --- |
| Warrants: | _____ |
| Options: | _____ |

Describe any other rights:

BlocPower ES 3 is a single member LLC (an SPE of BlocPower LLC) and as a result does not have a cap table. BlocPower ES3 also does not have warrants or options plan.

18. How may the rights of the securities being offered be materially limited, diluted or qualified by the rights of any other class of security identified above?

Because the Investor holds no voting rights in the company, the holders of a majority-in-interest of voting rights in the Company could limit the Investor's rights in a material way. For example, those interest holders could vote to change the terms of the agreements governing the Company's operations or cause the Company to engage in additional offerings (including potentially a public offering). These types of changes could limit the Investor's economic rights by causing the Company to pay off the notes the Investor has purchased before their maturity, thereby reducing the aggregate interest paid on the notes to the Investor.

Based on the risk that an Investor's rights could be limited, diluted or otherwise qualified, the Investor could lose all or part of his or her investment in the securities in this offering, and may never see positive returns.

Additional risks related to the rights of other security holders are discussed below, in Question 20.

19. Are there any differences not reflected above between the securities being offered and each other class of security of the issuer?

No.

20. How could the exercise of rights held by the principal shareholders identified in Question 6 above affect the purchasers of the securities being offered?

As holders of a majority-in-interest of voting rights in the Company, the principal unitholder(s) may make decisions with which the Investor disagrees, or that negatively affect the value of the Investor's securities in the Company, and the

Investor will have no recourse to change these decisions. The Investor's interests may conflict with those of the principal unitholder(s), and there is no guarantee that the Company will develop in a way that is optimal for or advantageous to the Investor.

For example, the principal unitholder(s) may change the terms of the operating agreement for the Company, change the terms of securities issued by the Company, change the management of the Company, and even force out minority holders of securities. The principal unitholder(s) also may force the Company to prepay the promissory notes before their maturity date. The principal unitholder(s) may make changes that affect the tax treatment of the Company in ways that are unfavorable to the Investor but favorable to them. The principal unitholder(s) may also vote to engage in new offerings and/or to register certain of the Company's securities in a way that negatively affects the value of the securities the Investor owns. The principal unitholder(s) may also have access to more information than the Investor, leaving the Investor at a disadvantage with respect to any decisions regarding the securities he or she owns.

The principal unitholder(s) have the right to redeem their securities at any time. The principal unitholder(s) could decide to force the Company to redeem their securities at a time that is not favorable to the Investor and is damaging to the Company. The exit of the principal unitholder(s) may affect the value of the Company and/or its viability.

Based on the factors described above, the Investor could lose all or part of his or her investment in the securities in this offering, and may never see positive returns.

21. How are the securities being offered being valued? Include examples of methods for how such securities may be valued by the issuer in the future, including during subsequent corporate actions.

The value of the promissory notes will be determined by the Company's senior management in accordance with U.S. generally accepted accounting principles. For example, the notes may be valued based on principal plus anticipated interest payments over the course of the term of the note.

22. What are the risks to purchasers of the securities relating to minority ownership in the issuer?

An Investor in the promissory notes will likely hold a minority position in the Company and will have no voting rights in the Company, and thus will be limited as to its ability to control or influence the governance and operations of the Company.

The marketability and value of the Investor's interest in the Company will depend upon many factors outside the control of the Investor. The Company will be managed by its officers and be governed in accordance with the strategic direction and decision-making of its management, and the Investor will have no independent right to name or remove an officer or member of the management of the Company.

23. What are the risks to purchasers associated with corporate actions, including additional issuances of securities, issuer repurchases of securities, a sale of the issuer or of assets of the issuer or transactions with related parties?

**Additional issuances of securities.** Following the Investor's investment in the Company, the Company may sell interests to additional investors. The Investor may have the opportunity to increase its investment in the Company in such a transaction, but such opportunity cannot be assured. The amount of additional financing needed by the Company, if any, will depend upon the maturity and objectives of the Company.

**Issuer Repurchase of Securities/Prepayment of Notes.** The Company has the right to repay principal and interest on the promissory notes at any time prior to the maturity date. If the Company repays principal and interest on the notes early, Investor will receive fewer interest payments than expected at purchase.

**A sale of the issuer or of assets of the issuer.** As a noteholder with no voting rights, the Investor will have no ability to influence a potential sale of the Company or a substantial portion of its assets. Thus, the Investor will rely upon the executive management of the Company and the management of the Company to manage the Company so as to maximize value for unitholders and ensure full payment of noteholders. Accordingly, the success of the Investor's investment in the Company will depend in large part upon the skill and expertise of the executive management of the Company and the management of the Company. If the management of the Company authorizes a sale of all or a part of the Company, or a disposition of a substantial portion of the Company's assets, there can be no guarantee that the amount received will be sufficient to repay Investor and other noteholders.

**Transactions with related parties.** The Investor should be aware that there will be occasions when the Company may encounter potential conflicts of interest in its operations. On any issue involving conflicts of interest, the executive management and management of the Company will be guided by their good faith judgment as to the Company's best interests. The Company may engage in transactions with affiliates, subsidiaries or other related parties, which may be on terms which are not arm's-length, but will be in all cases consistent with the duties of the management of the Company to its unitholders. By acquiring an interest in the Company, the Investor will be deemed to have acknowledged the existence of any such actual or potential conflicts of interest and to have waived any claim with respect to any liability arising from the existence of any such conflict of interest.

24. Describe the material terms of any indebtedness of the issuer:

*Loans*

| Lender | Climate Impact Notes |
| --- | --- |
| Issue date | 05/13/21 |

| Amount | $997,250.00 |
| --- | --- |
| Outstanding principal plus interest | $1,052,098.75 as of 02/28/23 |
| Interest rate | 5.5% per annum |
| Maturity date | 05/14/33 |
| Current with payments | Yes |

Raise Green CF #1

Loan

| Lender | Merck Family Foundation |
| --- | --- |
| Issue date | 11/29/21 |
| Amount | $100,000.00 |
| Outstanding principal plus interest | $112,329.00 as of 12/30/22 |
| Interest rate | 4.0% per annum |
| Maturity date | 12/31/31 |
| Current with payments | Yes |

Loan from Merck foundation

Loan

| Lender | Climate Impact Notes - 2nd offer |
| --- | --- |
| Issue date | 02/28/22 |
| Amount | $999,800.00 |
| Outstanding principal plus interest | $1,054,789.00 as of 02/28/23 |
| Interest rate | 5.5% per annum |
| Maturity date | 03/23/34 |
| Current with payments | Yes |

Raise Green CF #2

Loan

| Lender | Climate Impact Notes |
| --- | --- |
| Issue date | 04/29/22 |
| Amount | $808,800.00 |
| Outstanding principal plus interest | $748,380.00 as of 02/28/23 |
| Interest rate | 5.5% per annum |
| Maturity date | 05/16/34 |
| Current with payments | Yes |

Raise Green CF #3

INSTRUCTION TO QUESTION 24: name the creditor, amount owed, interest rate, maturity date, and any other material terms.

25. What other exempt offerings has the issuer conducted within the past three years?

| Offering Date | Exemption | Security Type | Amount Sold | Use of Proceeds |
| --- | --- | --- | --- | --- |
| 1/2021 | Section 4(a)(2) |  | $163,137 | General operations |

26. Was or is the issuer or any entities controlled by or under common control with the issuer a party to any transaction since the beginning of the issuer's last fiscal year, or any currently proposed transaction, where the amount involved exceeds five percent of the aggregate amount of capital raised by the issuer in reliance on Section 4(a)(b) of the Securities Act during the preceding 12-month period, including the amount the issuer seeks to raise in the current offering. In which any of the following persons had or is to have a direct or indirect material interest:

1. any director or officer of the issuer;
2. any person who is, as of the most recent practicable date, the beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, calculated on the basis of voting power;
3. if the issuer was incorporated or organized within the past three years, any promoter of the issuer;
4. or any immediate family member of any of the foregoing persons.

☑ Yes
☐ No

For each transaction specify the person, relationship to issuer, nature of interest in transaction, and amount of interest.

Name BlocPower LLC

Amount invested $163,137.00

Transaction type Other

Issue date 01/03/21

Relationship Owned Company

Relationship Parent Company

Capital contribution

INSTRUCTIONS TO QUESTION 26: The term transaction includes, but is not limited to, any financial transaction, arrangement or relationship (including any indebtedness or guarantee of indebtedness, or any series of similar transactions, arrangements or relationships).

Beneficial ownership for purposes of paragraph (2) shall be determined as of a date that is no more than 120 days prior to the date of filing of this offering statement and using the same calculation described in Question 6 of this Question and Answer format.

The term "number of the family" includes any child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the person, and includes adoptive relationships. The term "spousal equivalent" means a cohabitant occupying a relationship generally equivalent to that of a spouse.

Compare the amount of a related party's interest in any transaction without regard to the amount of the profit or loss involved in the transaction. Where it is not practicable to state the approximate amount of the interest, disclose the approximate amount involved in the transaction.

## FINANCIAL CONDITION OF THE ISSUER

27. Does the issuer have an operating history?

☑ Yes
☐ No

28. Describe the financial condition of the issuer, including, to the extent material, liquidity, capital resources and historical results of operations.

### Management's Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

### Overview

Invest in smarter, greener and healthier buildings for all

Energy efficiency and electrification projects can be challenging to review, manage, install and finance. BlocPower helps bring this all together for our customers - delivering smarter, healthier, greener buildings for all!

BlocPower is tackling climate change by giving every homeowner the opportunity to electrify-starting in low- and middle-income communities

Electrifying buildings is a trillion dollar opportunity. In five years, BlocPower intends to put a huge impact on decarbonization, potentially leveraging the public markets. We'll need this kind of ambition if we collectively want to stop climate change! Forward looking projections can't be guaranteed.

### Milestones

Blocpower Energy Services 3 LLC was incorporated in the State of Delaware in January 2021.

Since then, we have:

- BlocPower's parent is a leader in the trillion-dollar opportunity to decarbonize U.S. buildings
- BlocPower's parent was selected by Ithaca, NY, Denver, CO, San Jose, CA and other cities
- 100M+ raised by parent from investors like VoLo Earth, Microsoft, Kapor, Goldman Sachs, Bezos Earth Fund and SDCL
- Create clean energy jobs, particularly in disadvantaged communities
- Parent's diverse, dedicated & experienced 70 person team led company to 4000% growth since 2020
- Projects in LMI communities are well positioned to benefit from Inflation Reduction Act

### Historical Results of Operations

Our company was organized in January 2021 and has limited operations upon

which prospective investors may base an evaluation of its performance.

While the audited financial statements attached to the Form C are compiled financial statements for the parent company and all of its subsidiaries, the figures below are self-reported financials for just the subsidiary raising this round:

- Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $96,714.
- Assets. As of December 31, 2022, the Company had total assets of $4,391,754 including $351,984 in cash.
- Net Loss. The Company has had net losses of $65,427 for the fiscal year ended December 31, 2022.
- Liabilities. The Company's liabilities totaled $3,980,204 for the fiscal year ended December 31, 2022.

# Related Party Transaction

Refer to Question 26 of this Form C for disclosure of all related party transactions.

# Liquidity & Capital Resources

To-date, the company has been financed with $2,916,050 in debt and $144,926 in capital contributions.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 24 months before we need to raise further capital.

The Company is a single member LLC set up to function as a special purpose entity for the purpose of acquiring, holding, and leasing or selling clean energy efficient heating and air conditioning equipment. The Company is a wholly-owned subsidiary of BlocPower, LLC which is wholly owned by BlocPower Public Benefit Corporation (Parent Company). BlocPower, LLC maintains an investment in the Company.

BlocPower Public Benefit Corporation was established in the state of Delaware on December 12, 2013 for the purpose of fundraising and operating as a holding company. BlocPower LLC ("BlocPower"), a wholly-owned subsidiary of the Company, is a Brooklyn-based climate/energy technology startup that assists customers to find innovative energy solutions to improve building energy costs and consumption as well as utilizing proprietary software for analysis, leasing, project management, and monitoring of urban clean energy projects. In 2021, BlocPower also contracted with the City of New York to develop and manage a precision training and hiring initiative. BlocPower is wholly-owned by BlocPower Public Benefit Corporation. At the parent level, BlocPower Public Benefit Corporation maintains the investment in BlocPower, which is eliminated in consolidation. BlocPower has multiple wholly-owned subsidiaries (single member LLCs) that are set up to function as special purpose entities which acquire, hold, and lease or sell clean energy efficient heating and air conditioning equipment: BlocPower Energy Services 1 LLC ("ES1"), BlocPower Energy Services 1A LLC ("ES1A"), and BlocPower Energy Services 2 LLC ("ES2"). In January 2021, BlocPower Energy Services 3 LLC ("ES3"), a single member LLC, was formed and is wholly-owned by BlocPower. ES1A has not had any activity as of December 31, 2021. In September 2021, BuildingBloc LLC ("BuildingBloc"), a single member LLC, was formed and is wholly-owned by BlocPower. BuildingBloc had minimal activity and did not commence operations during the year ended December 31, 2021. BlocPower maintains investments in the above-cited single member LLCs, which are eliminated in consolidation.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don't have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 6 months. Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

# Runway & Short/Mid Term Expenses

Blocpower Energy Services 3 LLC cash in hand is $473,939, as of February 2023. Over the last three months, revenues have averaged $10,000/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $13,500/month, for an average burn rate of $3,500 per month. Our intent is to be profitable in 12 months.

BlocPower (parent company) audited financials cover 2020 and 2021. Material changes and trends include: * - Additional city and utility enterprise awards, including NYC workforce program has increased parent company revenue materially, * - Additional city and utility awards lead to more opportunities to finance projects at ES2. - Inflation Reduction Act with significant incentives for

finance projects at LMI and decarbonization projects

BlocPower ES3 expects revenues to increase around 20% (to ~$12,000/month), within the next 6 months, as more buildings go online and stay relatively stable for next 3-12 months as previous projects are completed. The founders believe this will result in roughly break-even operations.

BlocPower Energy Services 3 (BPES3) is not currently profitable. As described above, revenues will increase as projects are completed. BPES3 is managed under operating agreement with parent company BP LLC. Once projects are installed, the projects produce long-term cashflows with minimal overhead. If for some reasons BPES3 would need to manage its own operations, we believe it could service its debt and maintain operations profitably by relying on existing and in progress project cashflows.

Outside of funds raised via Wefunder, BPES3 has successfully raised and maintained 3 previous Reg CF rounds totally approximately $2.8 million. In addition, other internal financing like BlocPower LLC's previous approximately $144,000 equity investment and the Merck Foundation's $100,000 loan are available financing.

All projections in the above narrative are forward-looking and not guaranteed.

INSTRUCTIONS TO QUESTION 28: The discussion must cover each year for which financial statements are provided. For issuers with an prior operating history, the discussion should focus on financial milestones and operational, liquidity and other challenges. For issuers with an operating history, the discussion should focus on whether historical results and cash flows are representative of what investors should expect to be future. Take into account the proceeds of the offering and any other known or pending sources of capital. Discuss how the proceeds from the offering will affect liquidity, whether receiving these funds and any other additional funds is necessary to the viability of the business, and how quickly the issuer anticipates using its available cash. Describe the other available sources of capital in the business, such as lines of credit or required contributions by shareholders. References to the issuer to this Question 28 and these instructions refer to the issuer and its predecessors, if any.

## FINANCIAL INFORMATION

29. Include financial statements covering the two most recently completed fiscal years or the period(s) since inception, if shorter:

Refer to Appendix C, Financial Statements

I, Cullen Kasunic, certify that:

(1) the financial statements of Blocpower Energy Services 3 LLC included in this

Form are true and complete in all material respects; and

(2) the financial information of Blocpower Energy Services 3 LLC included in this

Form reflects accurately the information reported on the tax return for Blocpower

Energy Services 3 LLC filed for the most recently completed fiscal year.

Cullen Kasunic
Chief Project Finance Officer

## STAKEHOLDER ELIGIBILITY

30. With respect to the issuer, any predecessor of the issuer, any affiliated issuer, any director, officer, general partner or managing member of the issuer, any beneficial owner of 20 percent or more of the issuer's outstanding voting equity securities, any promoter connected with the issuer in any capacity at the time of such sale, any person that has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with such sale of securities, or any general partner, director, officer or managing member of any such solicitor, prior to May 16, 2016:

(1) Has any such person been convicted, within 10 years (or five years, in the case of issuers, their predecessors and affiliated issuers) before the filing of this offering statement, of any felony or misdemeanor:

i. In connection with the purchase or sale of any security? ☐ Yes ☑ No
ii. Involving the making of any false filing with the Commission? ☐ Yes ☑ No
iii. arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities? ☐ Yes ☑ No

(2) Is any such person subject to any order, judgment or decree of any court of competent jurisdiction, entered within five years before the filing of the information required by Section 4A(b) of the Securities Act that, at the time of filing of this offering statement, restrains or enjoins such person from engaging or continuing to engage in any conduct or practice:

i. In connection with the purchase or sale of any security? ☐ Yes ☑ No
ii. Involving the making of any false filing with the Commission? ☐ Yes ☑ No
iii. arising out of the conduct of the business of an underwriter, broker, dealer, municipal securities dealer, investment adviser, funding portal or paid solicitor of purchasers of securities? ☐ Yes ☑ No

(3) is any such person subject to a final order of a state securities commission (or an agency or officer of a state performing like functions); a state authority that supervises or examines banks, savings associations or credit unions; a state insurance commission (or an agency or officer of a state performing like functions); an appropriate federal banking agency; the U.S. Commodity Futures Trading Commission; or the National Credit Union Administration that:

i. at the time of the filing of this offering statement bars the person from:

A. association with an entity regulated by such commission, authority, agency or officer? ☐ Yes ☑ No
B. engaging in the business of securities, insurance or banking? ☐ Yes ☑ No
C. engaging in savings association or credit union activities? ☐ Yes ☑ No

ii. constitutes a final order based on a violation of any law or regulation that prohibits fraudulent, manipulative or deceptive conduct and for which the order was entered within the 10-year period ending on the date of the filing of this offering statement? ☐ Yes ☑ No

(4) is any such person subject to an order of the Commission entered pursuant to Section 15(b) or 15B(c) of the Exchange Act or Section 203(c) or (f) of the Investment Advisers Act of 1940 that, at the time of the filing of this offering statement:

i. suspends or revokes such person's registration as a broker, dealer, municipal securities dealer, investment adviser or funding portal? ☐ Yes ☑ No
ii. places limitations on the activities, functions or operations of such person? ☐ Yes ☑ No
iii. bars such person from being associated with any entity or from participating in the offering of any penny stock? ☐ Yes ☑ No

(5) is any such person subject to any order of the Commission entered within five years before the filing of this offering statement that, at the time of the filing of this offering statement, orders the person to cease and desist from committing or causing a violation or future violation of:

i. any scienter-based anti-fraud provision of the federal securities laws, including without limitation Section 17(a)(1) of the Securities Act, Section 10(b) of the Exchange Act, Section 18(c)(1) of the Exchange Act and Section 206(1) of the Investment Advisers Act of 1940 or any other rule or regulation thereunder? ☐ Yes ☑ No
ii. Section 5 of the Securities Act? ☐ Yes ☑ No

(6) is any such person suspended or expelled from membership in, or suspended or barred from association with a member of, a registered national securities exchange or a registered national or affiliated securities association for any act or omission to act constituting conduct inconsistent with just and equitable principles of trade?

☐ Yes ☑ No

(7) Has any such person filed (as a registrant or issuer), or was any such person or was any such person named as an underwriter in, any registration statement or Regulation A offering statement filed with the Commission that, within five years before the filing of this offering statement, was the subject of a refusal order, stop order, or order suspending the Regulation A exemption, or is any such person, at the time of such filing, the subject of an investigation or proceeding to determine whether a stop order or suspension order should be issued?

☐ Yes ☑ No

(8) is any such person subject to a United States Postal Service false representation order entered within five years before the filing of the information required by Section 4A(b) of the Securities Act, or is any such person, at the time of filing of this offering statement, subject to a temporary restraining order or preliminary injunction with respect to conduct alleged by the United States Postal Service to constitute a scheme or device for obtaining money or property through the mail by means of false representations?

☐ Yes ☑ No

If you would have answered "Yes" to any of these questions had the conviction, order, judgment, decree, suspension, expulsion or bar occurred or been issued after May 16, 2016, then you are NOT eligible to rely on this exemption under Section 4(a)(6) of the Securities Act.

INSTRUCTIONS TO QUESTION 30: Final order means a written directive or declaratory statement issued by a federal or state agency, described in Rule 30A(c)(1) of Regulation Crowdfunding, under applicable statutory authority that provides for notice and an opportunity for hearing, which constitutes a final disposition or action by that federal or state agency.

No matters are required to be disclosed with respect to events relating to any affiliated issuer that occurred before the affiliation cause if the affiliated entity is not (i) in control of the issuer or (ii) under common control with the issuer by a third party that was in control of the affiliated entity at the time of such events.

## OTHER MATERIAL INFORMATION

31. In addition to the information expressly required to be included in this Form, include:

- (1) any other material information presented to investors; and
- (2) such further material information, if any, as may be necessary to make the required statements, in the light of the circumstances under which they are made, not misleading.

All information presented to investors hosted on Wefunder.com is available in Appendix A: Business Description & Plan.

INSTRUCTIONS TO QUESTION 30: If information is presented to investors in a format, media or other means not able to be reflected in text or portable document format, the issuer should include:

(a) a description of the material content of each information;
(b) a description of the format to which such disclosure is presented; and
(c) in the case of disclosure in video, audio or other dynamic media or format, a transcript or description of such disclosure.

## ONGOING REPORTING

32. The issuer will file a report electronically with the Securities & Exchange Commission annually and post the report on its website, no later than:

120 days after the end of each fiscal year covered by the report.

33. Once posted, the annual report may be found on the issuer's website at:

https://www.blocpower.io//invest

The issuer must continue to comply with the ongoing reporting requirements until:

1. the issuer is required to file reports under Exchange Act Sections 13(a) or 15(d);
2. the issuer has filed at least one annual report and has fewer than 300 holders of record;
3. the issuer has filed at least three annual reports and has total assets that do not exceed $10 million;
4. the issuer or another party purchases or repurchases all of the securities issued pursuant to Section 4(a)(6), including any payment in full of debt securities or any complete redemption of redeemable securities; or the issuer liquidates or dissolves in accordance with state law.

## APPENDICES

Appendix A: Business Description & Plan

Appendix B: Investor Contracts

BlocPower Subscription Agreement

Appendix C: Financial Statements

Financials 1

Financials 2

Appendix D: Director & Officer Work History

Cullen Kasunic

Donnel A. Baird

Appendix E: Supporting Documents

ttw_communications_106817_052449.pdf

BlocPower_Energy_Services_3_LLC_

_Operating_Agreement_Single_Member_Manager_Managed_Executed_.pdf

## Signatures

Intentional misstatements or omissions of facts constitute federal criminal violations. See 18 U.S.C. 1001.

The following documents will be filed with the SEC:

Cover Page XML

Offering Statement (this page)

Appendix A: Business Description & Plan

Appendix B: Investor Contracts

BlocPower Subscription Agreement

Appendix C: Financial Statements

Financials 1

Financials 2

Appendix D: Director & Officer Work History

Cullen Kasunic

Donnel A. Baird

Appendix E: Supporting Documents

ttw_communications_106817_052449.pdf

BlocPower_Energy_Services_3_LLC_

BlocPower\_Energy\_Services\_3\_LLC\_  
\_Operating\_Agreement\_Single\_Member\_Manager\_Managed\_Executed\_pdf

*Pursuant to the requirements of Sections 4(a)(6) and 4A of the Securities Act of 1933 and Regulation Crowdfunding (§ 227.100 et seq.), the issuer certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form C and has duly caused this Form to be signed on its behalf by the duly authorized undersigned.*

Blocpower Energy Services 3 LLC

By

**Cullen Kasunic**

Project Finance Officer

Pursuant to the requirements of Sections 4(a)(6) and 4A of the Securities Act of 1933 and Regulation Crowdfunding (§ 227.100 et seq.), this Form C and Transfer Agent Agreement has been signed by the following persons in the capacities and on the dates indicated.

**Donnel Baird**

CEO

2/28/2023

**Cullen Kasunic**

Project Finance Officer

2/28/2023

*The Form C must be signed by the issuer, its principal executive officer or officers, its principal financial officer, its controller or principal accounting officer and at least a majority of the board of directors or persons performing similar functions.*

I authorize Wefunder Portal to submit a Form C to the SEC based on the information I provided through this online form and my company’s Wefunder profile.

As an authorized representative of the company, I appoint Wefunder Portal as the company’s true and lawful representative and attorney-in-fact, in the company’s name, place and stead to make, execute, sign, acknowledge, swear to and file a Form C on the company’s behalf. This power of attorney is coupled with an interest and is irrevocable. The company hereby waives any and all defenses that may be available to contest, negate or disaffirm the actions of Wefunder Portal taken in good faith under or in reliance upon this power of attorney.

**Attachment 2:** `document_2.pdf`

# INVEST TO SAVE THE PLANET

![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)

INVEST IN BLOCPOWER

Invest in smarter, greener and healthier buildings for all

bpes3.blocpower.io

New York NY

Technology

PBC & B Corp

## Highlights

1. BlocPower's parent is a leader in the trillion-dollar opportunity to decarbonize U.S. buildings
2. BlocPower's parent was selected by Ithaca, NY, Denver, CO, San Jose, CA and many other cities and utilities
3. 150M+ raised by parent from investors like VoLo Earth, Microsoft, Kapor, Goldman Sachs, Bezos Earth Fund and SDCL

4 🏠 Create clean energy jobs, particularly in disadvantaged communities
5 🏠 Parent's diverse, dedicated & experienced 70 person team led company to 4000% growth since 2020
6 ⚡ Projects in LMI communities are well positioned to benefit from Inflation Reduction Act

## Our Team

![img-2.jpeg](img-2.jpeg)

### **Donnel A. Baird** Founder and CEO

Donnel currently sits on the Board of the Sierra Club Foundation as well as the Small Business Advisory Board of the New York Federal Reserve Bank and the Entrepreneurship Board of Columbia Business School.

Energy efficiency and electrification projects can be challenging to review, manage, install and finance. BlocPower helps bring this all together for our customers - delivering smarter, healthier, greener buildings for all!

![img-3.jpeg](img-3.jpeg)

### **Keith L. Kinch** General Manager

Prior to joining BlocPower, Keith managed the largest solarize programs in New York, persuading over 200 low-income households in New York City's poorest neighborhood to finance and install solar PV on their homes.

![img-4.jpeg](img-4.jpeg)

### **Jon Moeller** COO

Previously Jon was CEO and board member at MACH Energy, a sustainability SaaS leader for commercial buildings, with nearly half a billion square feet using the system. MACH was acquired by a PE-backed strategic buyer.

![img-5.jpeg](img-5.jpeg)

### **Dom Lempereur** Chief of Engineering,

Dom Lempereur leads the BlocPower engineering department. Over 25 years, Dom has developed, performed, and managed energy assessments for 6,000 buildings, totaling over 200 million square feet.

![img-6.jpeg](img-6.jpeg)

### **Cullen Kasunic** Head of Project Finance

Cullen is the lead in the establishment, operation and expansion of company project finance capacity, including overseeing the formation and operation of the financing subsidiaries.

![img-7.jpeg](img-7.jpeg)

### **Ebonie Nichols** SVP of Finance

Ebonie Nichols, CPA has forged an outstanding career of financial leadership across several different industries including real estate, non-profit, and technology. She has led complex strategic initiatives at Tishman Speyer and other leaders.

![img-8.jpeg](img-8.jpeg)

### **Alex Apter** Co-Head of Marketing and Communications

Alex Apter is a 15 year marketing and business operations veteran focused at BlocPower on conveying the benefits of electrification to building owners.

![img-9.jpeg](img-9.jpeg)

### **Bradley Tran** Co-Head of Product Management

Bradley Tran is the co-head of product management at BlocPower. Previously Bradley held senior building tech roles at Carbon Lighthouse, Sidewalk Labs and Accenture

![img-10.jpeg](img-10.jpeg)

### **Valerie Shoates** Finance and Special Initiatives Associate

Val works on financing and other critical programs at BlocPower, including workforce. Previously, Val was in VC at Plum Alley Investments. Plum Alley invests in technology and healthcare companies led by female founders in STEM fields.

![img-11.jpeg](img-11.jpeg)

### **Cullen Kasunic**

Financing at BlocPower (FastCompany's #4 Most Innovative Company, with 1500+ building energy upgrades).

![img-12.jpeg](img-12.jpeg)

### **Donnel Baird**

# Transforming low-income neighborhoods into greener, safer communities

**Important:** The investment is in BlocPower Energy Services 3 (BPES3), a wholly-owned subsidiary of BlocPower LLC (“BlocPower”), formed to own and operate energy projects from the BlocPower pipeline, installed in client buildings. While BlocPower LLC operates BPES3 through a management agreement, debt or equity in BlocPower LLC itself is not being offered.

## So what is BlocPower?

BlocPower is a Brooklyn-based climate technology startup that is making American cities smarter, greener and healthier. BlocPower partners with utilities, government agencies, and building owners to identify unhealthy, energy-wasting buildings to retrofit. The company then works with these building owners to develop, install and finance upgrades that reduce fossil fuel consumption-like replacing an oil burning boiler with an electric heat pump. BlocPower earns revenue via installation profits, financing fees, and enterprise contracts.

![img-13.jpeg](img-13.jpeg)

"BlocPower is electrifying buildings much like Tesla is electrifying cars. By eliminating their use of fossil fuels and making them smarter and healthier, we're increasing the health and wealth of building owners and occupants and creating economic opportunities in underserved communities."- Donnel Baird, BlocPower CEO

## History of BlocPower?

At the age of 22-ish, Donnel Baird, CEO, and Founder of BlocPower was a young community organizer walking around Brooklyn on one freezing winter day, he looked around and all of the apartment buildings had their windows open. It reminded him of his childhood when he left his windows open during the wintertime due to his building not having heat, and having to open the windows to release the carbon monoxide from the heat of the oven. From that day, he knew there was a way to make things better for not only the residents but the world.

![img-14.jpeg](img-14.jpeg)

*Blocpower’s team enjoying a sunny day on their office’s rooftop in 2019. Since then, the team has grown to twice this size!*

A few years later BlocPower was born, since its founding in 2014, the parent company has retrofitted more than 1,000 buildings in disadvantaged communities in New York City, with projects underway in 25 cities. The business is based on the Company’s proprietary software for analysis, leasing, project management, and monitoring. The company’s clean energy projects save building owners 20%-70% on annual energy costs and provide residents with healthier more comfortable homes.

### Why we’re doing this?

The funds raised will go directly to fund energy efficiency, electrification or renewable energy projects-projects that have already been earmarked in New York and California.

So you’re probably wondering: why is a company that has raised over $100M in equity and debt financing raising on a community platform? Well, at BlocPower we offer no-money-down system leasing for building owners, covering all maintenance and repairs for the duration of the contract. This reduces barriers to entry, complexity, capital requirements, and technology risk for the customers.

However, it requires upfront capital needs in order to supply these systems to those that need them. The capital raised from ongoing community rounds supplements the financing needed for projects and allows investors to play a critical role in helping communities become more resilient by:

- **Improving Public Health** from filters that reduce the spread of pollutants and infectious diseases, including COVID; and from non-combustion heating units that reduce exposure to pollutants that increase the risk to asthma, especially for young children.
- **Address Climate Change** by transitioning away from gas and oil-burning heating systems and reducing overall energy use which will reduce

greenhouse gas emissions.

- Improving Economic Outcomes by reducing energy bills for tenants and increasing net operating income for building owners through reduced energy bills, as well as driving increases in property values.
- Generating Employment Opportunities through new job opportunities and workforce training developed for hard-to-employ workers in project neighborhoods.

Just listen to one of our customers 👇

![img-15.jpeg](img-15.jpeg)

### Community Impact is important

Job creation and community inclusion are one of our core beliefs at BlocPower. Through our Civilian Climate Corps in New York City, we have prepared roughly 1,500 New Yorkers from communities impacted by gun violence for green careers-with 400 securing jobs so far. Jobs include solar and HVAC installation, air quality monitoring, EV charging maintenance and more.

![img-16.jpeg](img-16.jpeg)

![img-17.jpeg](img-17.jpeg)

### Current Traction:

**Blocpower LLC**, the owner of BPES3, has raised over $100M+ from the world’s top investors including American Family Insurance Institute for Corporate and Social Impact, AccelR8, The Goldman Sachs Urban Investment Group, Kapor Capital, Elemental Excelerator, CityRock Venture Partners, Hatzimemos/Libby, The Schmidt Family Foundation, Salesforce Ventures, Andreessen Horowitz, MaC Venture Capital, Exelon, Echoing Green, and the New York Ventures of the Empire State Development Corporation. To reiterate, investors in this round are investing in BPES3.

**BlocPower (parent) continues to grow its project pipeline**, standing at well over 500 buildings, and to expand into new cities and states. Among the exciting growth opportunities, in August 2021, BlocPower won a $37M New York City Mayor’s Office of Criminal Justice contract aimed at mitigating inner-city violence through workforce development programs. Through this, BlocPower launched the aforementioned Civilian Climate Corps.

BlocPower (parent) recently formed a public-private partnership with Menlo Park, California to electrify 95% of its over 10,000 buildings by 2030. And, the City of Ithaca has named BlocPower as the sole Project Manager for an electrification program that aims to fully decarbonize the city’s building stock. BlocPower aims to decarbonize around 6000 Ithaca buildings in the next 5 years.

BlocPower aims to decarbonize around 6000 Ithaca buildings in the next 5 years. Doing projects was their top priority and BlocPower was chosen specifically for its ability to provide a full solution platform: technology-based design, expert electrification management, community organizing, and finance.

### Competitive Advantage:

BlocPower offers no-money-down system leasing for building owners, covering all maintenance and repairs for the duration of the contract. This reduces barriers to entry, complexity, capital requirements, and technology risk for the customers.

BlocPower transforms a fragmented, high touch, expensive, low volume incumbent process into a turnkey, digital, high volume operational process that is quick and streamlined by software and finance innovation consisting of:

- Pre-screening tool, to identify buildings with high feasibility for energy efficiency projects
- Virtual site-assessment tool, which allows remote scoping of work
- Buildings database containing tens of thousands of buildings nationwide, which powers the pre-screening and assessment tools
- Workflow management tools
- Financial optimization models, to provide energy project savings quotes to customers

*Buildings with an ideal project profile identified by BlocMaps software:*

![img-18.jpeg](img-18.jpeg)

![img-19.jpeg](img-19.jpeg)

Building owners complete a 60 second intake process:

![img-20.jpeg](img-20.jpeg)

Qualified buildings receive a custom project estimate and scope of work:

![img-21.jpeg](img-21.jpeg)

![img-0.jpeg](img-0.jpeg)

## Use of Funds:

The funds raised will go directly to fund energy efficiency or renewable energy projects - projects have already been earmarked in New York and California.

Additional projects with similar or better financial returns will be selected from the pipeline to meet the total raised funds. Energy-efficient upgrades can include, but are not limited to:

- Air Source Heat Pump Installation / fossil-fuel-fired system conversion
- LED lights
- Monitoring and control systems
- Domestic hot water upgrades
- Insulation and air sealing
- Window replacement
- Low flow fixtures and water-saving measures
- Combined Heat and Power (CHP)
- Renewable Energy including Solar PV and Community Solar
- Battery Storage

## How are you the investor paid back?

Glad you asked! Revenues from 15-20 year leases with building customers for

completed projects are the primary source to pay the 6.5% interest plus your original investment back. BlocPower prices the leases to make a modest profit while covering expected expenses, which includes your annual payment. The Note is structured like an amortizing mortgage, paying annually over 12 years, both a portion of your original investment and accrued interest. If the Company calls the Note prior to the maturity date, you will receive your principal paid back sooner, along with an additional 5% of principal, paid by the Company as a prepayment penalty.

The fun part! BlocPower Energy Services 3 will generally focus on energy efficiency and renewable energy projects for single-family homes, community facilities, small commercial buildings, small multifamily (generally 2-4 units), and for medium to larger multifamily units (4+), outside the state of New York. Projects financed by this Offering are expected to have long-term 15-20 year contracts.

You can see examples of projects at http://bpes3.blocpower.io !

The Company benefits from access to the specialty departments at BlocPower: Marketing, Finance, Construction, and Engineering, and is not charged directly for these costs. BlocPower does charge a 0.4% annual management fee to the Company based on project asset value to cover specific accounting, legal, insurance, and IT-related expenses paid by BlocPower for the benefit of the Company.

Thank you all for joining our journey, from our family to you.

**Attachment 3:** `document_3.pdf`

# BlocPower Energy Services 3
## LLC

Subscription Agreement

Target Offering Amount of $50,000 to a Maximum Offering Amount of $3,150,000

Climate Impact Notes - 4th Offer or “Notes”

6.50% Coupon Interest per Year

Fully Amortizing, Annual payments

12 yr Maturity (5/1/2035)

Senior and Unsecured Debt

Minimum Investment: $100

Incremental Amounts of $50

From February 28, 2023 to April 30, 2023

![img-0.jpeg](img-0.jpeg)

dc-1132399

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Please read and sign this Subscription Agreement promptly, and in no event later than the Offer Close Date.

During the Offering Period, Investors can ask questions directly to the Company on the "Q&A" located on the BlocPower Offering Page at www.wefunder.com. Questions related to the function and process of the funding portal can be directed to WeFunder at updates@wefunder.com

# 1. Offering.

This Subscription Agreement (this "Agreement") addresses the offer for sale (the "Offering") during the period from February 28, 2023 to April 30, 2023, subject to adjustment as described below (the "Offering Period", the last day of which is the "Offer Close Date") of up to $3,150,000 of unsecured debt securities (the "Notes") issued by BlocPower Energy Services 3, LLC, a Delaware limited liability company (the "Company"). The Notes will be issued as of the date immediately succeeding the Offer Close Date (the "Issuance Date").

The terms of the Notes are set forth in "Terms of the Offering" in the Form C submitted by the Company to the SEC as attached hereto as Appendix 2 ("Form C", and, together with all related attachments and disclosures thereto, the "Offering Disclosure Documents"), and are summarized in Appendix 1 hereto.

The Notes are not being registered under the Securities Act of 1933, as amended ("Securities Act"), or under the securities laws of the State of Delaware (or of any other state or jurisdiction), but rather are being offered by the Company pursuant to certain exemptions from registration under "Regulation Crowdfunding", as adopted by the U.S. Securities and Exchange Commission ("SEC") under the Securities Act of 1933 and the Securities Exchange Securities Act of 1934 (collectively, "Regulation Crowdfunding").

In accordance with Regulation Crowdfunding, the Company may elect to shorten the Offering Period by notice to the Offerees not less than five (5) Business Days prior to the new Offer Close Date. The Company may also elect to extend the Offering Period under certain circumstances.

The undersigned (the "Offeree") understands that during the Offering Period any material updates to the Offering will be communicated to the Offeree via email from WeFunder and will be available on the Company's Offering Page at www.wefunder.com. The Offeree will be asked to reconfirm its investment commitment by responding to the email, or in another manner if outlined in the communication from WeFunder, and will not be required to reconfirm by re-signing this Agreement.

# 2. Subscription.

By signing this Agreement, the Offeree confirms that it wishes to subscribe for purchase of Notes (the "Subscribed Securities") in an original principal amount ("Principal Amount") as set forth on the signature page below. The Offeree's obligation hereunder is unconditional,

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without limitation, and does not depend on the issue and sale of any other Subscribed Securities to any other person or entity.

Subscriptions are generally allocated on a first-come, first-served basis if interest in the Offering exceeds the minimum targeted offering amount. The Company is under no obligation to accept any additional subscriptions for the Subscribed Securities once the Company has received subscriptions for the maximum offering amount.

The Offeree also understands that (i) the Company has the unconditional right, in its sole discretion, to accept, partially accept, or reject this subscription, or withdraw or abandon the Offering in whole, and (ii) this subscription is contingent on the Offeree qualifying under the suitability standards described below.

The subscription is deemed to be accepted by the Company only when this Agreement is signed by a duly authorized officer of the Company and delivered to the Offeree after the Closing (as defined below).

At any time up to 48 hours prior to the Offer Close Date, the Offeree may cancel any investment commitment made in connection with the Offering for any reason, in which case any amounts paid by Offeree will be refunded to the Offeree in full (without interest).

### 3. Closing and Payment.

The closing of the purchase and sale of the Subscribed Securities (the "Closing") will take place on the Issuance Date or at such other time as the Company may designate by notice to the Offeree.

The Offeree shall pay to Silicon Valley Bank (the "Escrow Agent") in immediately available funds (or other means approved by the Company prior to the Offer Close Date) the full purchase price for the Subscribed Securities (the "Purchase Price") equal to the 100% of Principal Amount thereof, and shall use reasonable efforts to do so prior to the Offer Close Date.

On or about the Issuance Date, if the Company has accepted the Offeree's subscription, the Company will countersign this Agreement, the Escrow Agent will release the funds to the Company, and the Company will issue the Subscribed Securities to the Offeree.

The Offeree understands that: (i) if its subscription is rejected in whole, or in part, or if the Offering is withdrawn, the funds that the Offeree has deposited constituting the Purchase Price will be refunded promptly without interest; and (ii) if the Offeree's subscription is accepted, such funds will be released to the Company as payment of the Purchase Price.

### 4. Record of Purchase; Uncertificated Securities.

If the Offeree's subscription is accepted in whole or in part by the Company, the Offeree will receive a signed counterpart of this Agreement as a record of its purchase of the Subscribed Securities. This process may take several days or more after the Offer Close Date.

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The Offeree will also receive notice from the Company after the Offer Close Date of the digital entry of the Subscribed Securities as reflected on the books and records of the Company.

The Company will maintain all books and records electronically. The Offeree hereby waives any right to receive a physical certificate representing the Subscribed Securities and consents and agrees to the issuance of uncertificated Notes.

# 5. Representations and Warranties of the Company.

The Company represents and warrants to the Offeree with respect to the transactions contemplated hereby as follows:

# (a) Organization and Standing

The Company is a limited liability company duly organized and existing under the laws of Delaware and is in good standing under such laws. The Company has the requisite power to own its assets and to carry on its business as presently conducted and as proposed to be conducted.

# (b) Power

The Company has all requisite power to execute and deliver this Agreement, and to carry out and perform its obligations under the terms of this Agreement. This Agreement will be duly authorized and executed by the Company, and will represent a valid, binding, and enforceable obligation of the Company in accordance with its terms.

# (c) Authorization

The Notes, when authorized and issued in compliance with the provisions of this Agreement and the Appendices hereto, will be validly issued, fully paid, and non-assessable, and will be free of any liens or encumbrances; provided, however, that the Notes will be subject to restrictions on transfer under state and federal securities laws and as otherwise set forth herein.

# 6. Representations of the Offeree.

The Offeree represents and warrants to the Company and WeFunder as follows:

# (a) Suitability Standards

(i) the Offeree is familiar with and understands the business and financial position of the Company, the risks of an investment in the Company, and the rights and restrictions applicable to the Subscribed Securities, all as described in the Offering Disclosure Documents;

(ii) the Offeree (together with its professional advisors or representatives, if any) has sufficient knowledge and experience in business and financial matters to be capable of evaluating the merits and risks of an investment in the Company and the Subscribed Securities;

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(iii) the Offeree can bear the economic risk of the purchase of the Subscribed Securities, including the total loss of the Offeree's investment in the Subscribed Securities, and has adequate means for the Offeree's current needs and possible contingencies and has no need for liquidity in this investment;
(iv) any financial information that it has provided to WeFunder and in this Agreement accurately reflects its financial condition at the Issuance Date, and the Offeree anticipates no material adverse change to that condition;
(v) all of the information the Offeree has provided in this Agreement is complete, true, and correct in all material respects;
(vi) Including the Purchase Price set forth on the signature page hereto, in the past 12-month period the Offeree has not exceeded the investment limit as set forth in Rule 100(a)(2) of Regulation Crowdfunding;

(b) Disclosure of Information

(i) the Offeree has had access to such information concerning the Company and the Subscribed Securities as the Offeree deems necessary to enable it to make an informed investment decision concerning the purchase of the Subscribed Securities;
(ii) the Offeree has received and read the Offering Disclosure Documents (including without limitation any disclosure related to certain "risk factors" incident to an investment in the Subscribed Securities) including all exhibits, appendices, attachments, and supplements thereto;
(iii) the Offeree has been offered the opportunity to ask such questions and inspect such documents concerning the Company and its business and affairs as the Offeree has requested;
(iv) in determining to purchase the Subscribed Securities, the Offeree has relied solely upon the advice of the Offeree's legal counsel, accountant and other financial advisors with respect to the tax, investment, and other consequences involved in purchasing the Subscribed Securities, and acknowledges that the information provided in the Offering Disclosure Documents does not constitute investment, accounting, legal, or tax advice from the Company or WeFunder.

(c) Power & Authority

(i) if the Offeree is an individual, that the Offeree (A) is at least eighteen (18) years of age; (B) maintains his or her principal residence in the State shown in Section D; and (C) has the adequate means of providing for his or her current needs and all personal and business contingencies;

(ii) the Offeree has all requisite authority (and in the case of an individual, the capacity) to purchase the Subscribed Securities, enter into this Agreement, and to perform all the obligations required to be performed by the Offeree pursuant to this Agreement, and such purchase will not contravene with any law, rule or regulation binding on the

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Offeree or any investment guideline or restriction applicable to the Offeree, and this Agreement constitutes the Offeree's valid and legally binding obligation, enforceable in accordance with its terms;

(d) No Resale; No Withholding; Manner of Offering

(i) the Offeree is acquiring the Subscribed Securities for its own account, not as nominee or agent, without a view to distribution or resale of any part thereof and that the Offeree has no present intention, agreement or arrangement to sell, or otherwise transfer, distribute or dispose of any part of the Subscribed Securities to any other person (other than as expressly permitted by law);

(ii) the Offeree is not subject to backup withholding; and

(e) Updates and Reliance

The Offeree shall notify WeFunder at updates@wefunder.com immediately of any material change in any statement made by the Offeree in this Agreement occurring prior to the closing of the purchase of the Subscribed Securities.

The Offeree understands that the Company and WeFunder are relying on the accuracy and completeness of the representations made by the Offeree to WeFunder and in this Agreement.

# 7. Acknowledgements and Understandings of the Offeree.

(a) No Registration; No Reliance

The Offeree acknowledges and confirms to WeFunder and the Company that it understands the following:

(i) the Subscribed Securities have not been registered under the Securities Act or the securities laws of any state (including without limitation the state of Delaware);

(ii) no federal or state agency, including the SEC, has passed upon, or endorsed, the merits of this Offering or the accuracy or adequacy of the information contained in the Offering Disclosure Documents, or made any finding or determination as to the appropriateness of the Subscribed Securities for public investment;

(iii) the Company has no obligation or intention to register any of the Subscribed Securities for resale under the Securities Act or any state securities laws, or to take any action which would make available any exemption from the registration requirements of any such laws, and that the Offeree may be precluded from selling or otherwise transferring the Subscribed Securities or any portion thereof unless the transfer is otherwise in accordance with such laws and the terms of the Offering Disclosure Documents; and even if the Subscribed Securities were to become freely transferable, a secondary market in the Subscribed Securities may not develop;

(iv) the Subscribed Securities are characterized as "restricted securities" under the federal securities laws inasmuch as they are being or will be acquired from the Company in a

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transaction not involving a public offering, and that under such laws and applicable regulations such securities will be subject to restrictions upon their transferability; the Subscribed Securities will not be, and the Offeree will have no right to require that they be, registered under such laws, there is no public market for the Subscribed Securities, and none is expected to develop; accordingly, it may not be possible for the Offeree to liquidate its investment in the Company;

(v) it is not relying and will not rely on any communication (written or oral) of the Company, WeFunder, or any of their respective affiliates, as investment advice or as a recommendation to purchase the Subscribed Securities;
(vi) none of the Company, WeFunder or any of their respective affiliates has made any representation regarding the proper characterization of the Subscribed Securities for purposes of determining the Offeree's authority or suitability to invest in them;

(b) Transfer Restrictions

(i) the Subscribed Securities are restricted from transfer for a period of time under applicable federal and state securities laws and that the Securities Act and the rules of the SEC provide in substance that the Offeree may dispose of the Securities only (A) pursuant to an effective registration statement under the Securities Act, or an exemption therefrom, or (B) as further described in Section 227.501 of Regulation Crowdfunding, after which certain state restrictions may apply (See Appendix 3 - Restrictions on the Transfer or Sale of Securities - for important details on restrictions);
(ii) the Company has not: (A) given any guarantee or effect or benefit (either legal, regulatory, tax, financial, accounting or otherwise) of an investment in the Subscribed Securities; or (B) made any representation to the Offeree regarding the legality of an investment in the Subscribed Securities under applicable legal investment or similar laws or regulations;
(iii) consequently, the Offeree will bear the economic risks of the investment in the Subscribed Securities for an indefinite period of time.

(c) No Cancellation

The Offeree understands that it may not cancel, terminate or revoke this Agreement except (i) as set forth in Section 2 above, or (ii) as may be applicable in accordance with applicable securities laws, the Securities Act, or other applicable law, and that this Agreement will survive his or her death or disability and is binding on his or her heirs, executors, administrators, successors and assigns.

# 8. Covenants of the Offeree.

The Offeree covenants and agrees as follows:

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(i) the Offeree shall, within ten (10) days after the receipt of a written request from the Company, provide such information, and shall execute and deliver such documents, as reasonably may be necessary to comply with any and all laws and regulations to which the Company is subject;
(ii) for the first year after purchase of the Subscribed Securities, the Offeree shall not sell, assign, pledge, give, transfer or otherwise dispose of the Subscribed Securities or any interest therein, or make any offer or attempt to do any of the foregoing, except with the prior written consent of the Company, which consent shall not be unreasonably withheld if the proposed transfer complies with the requirements of Appendix 3 for such period;
(iii) after such one-year period, any agreement to transfer or sell the Subscribed Securities is subject to prior written consent of the Company, which consent shall not be unreasonably withheld if the proposed transfer complies with the requirements of Appendix 3 for such period.

# 9. Indemnification.

The Offeree shall indemnify, hold harmless and defend (i) the Company, (ii) the shareholders or other owners of the Company, (iii) WeFunder, and (iv) the other Holders, together with their respective officers, directors, employees, agents, affiliates, successors, and permitted assigns (the "Indemnified Parties"), from all damages, losses, costs, and expenses (including reasonable attorneys' fees) that they may incur by reason of the Offeree's failure to fulfill any of the terms or conditions of this Agreement or by reason of any breach of the representations and warranties made by the Offeree in this Agreement or in connection with any other Offering Disclosure Documents.

# 10. Information and Notices.

All notices and other communications provided for herein shall be in writing and are deemed to have been duly given if delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid or email to the following addresses (or such other address as either party specifies by notice in writing to the other):

If to the Company:

Name: BlocPower Energy Services 3, LLC

Address: 1623 Flatbush Ave Boc#222

Brooklyn, NY 11210

Email: investment@blocpower.io

Attention: Danlin Luo

If to the Offeree, to the address set forth on the signature page hereto.

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If at any time during the period that the Subscribed Securities are outstanding the Offeree's contact information changes, the Offeree shall promptly notify the Company of such changes in writing.

# 11. Miscellaneous.

# (a) Entire Agreement

This Agreement together with the exhibits, schedules, and attachments hereto, represents the entire agreement between the parties and supersedes all prior agreements or understandings between the parties. All exhibits schedules, and attachments to this Agreement are incorporated in this Agreement as if set forth in full.

# (b) Governing Law; Consent to Jurisdiction

This Agreement and any and all claims and disputes arising out of or relating to this Agreement shall be governed by and construed in accordance with the laws of the State of New York, with applying any conflict of law principles. The parties hereby consent to the personal jurisdiction of all federal and state courts in New York and agree that venue shall lie exclusively in New York County, NY.

# (c) Survival of Representations

All agreements, representations, and warranties made in writing by or on behalf of the Company or the Offeree in connection with the transactions contemplated by this Agreement, shall survive execution and delivery of this Agreement.

# (d) Amendment and Waiver

(i) Subject to clause 11(d)(ii) below, neither this Agreement nor any provision hereof shall be modified, changed, discharged or terminated except by an instrument in writing, signed by the party against whom any modification, change, discharge or termination is sought.
(ii) Any term of the Notes may be amended or waived with the written consent of the Company and the Holders of a majority of the outstanding principal amount of the Notes (the "Majority Holders"). Upon the effectuation of such waiver or amendment with the consent of the Majority Holders in conformance with this paragraph, such amendment or waiver shall be effective as to, and binding against the Holders of, all of the Notes. The Company shall promptly give written notice thereof to each Holder that has not previously consented to such amendment or waiver in writing, but the failure to give such notice does not affect the validity of such amendment or waiver.

# (e) Binding on Successors; Restriction on Assignment

Except as otherwise expressly provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding on, the successors, assigns, heirs, executors, and administrators of the parties to this Agreement; provided however, that the Offeree may not

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assign any of its rights or obligations under this Agreement without the prior written consent of the Company, which may be withheld in its absolute discretion.

# (f) Severability

If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

# (g) Headings

The various headings of this Agreement are for convenience of reference only, shall not affect the meaning or interpretation of this Agreement, and shall not be considered in construing this Agreement.

# (h) Fees and Expenses

Each party will pay the fees, expenses, and disbursements of its own counsel in connection with this Agreement and any amendments or waivers under or in respect to this Agreement.

# (i) Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument.

dc-1132399

IN WITNESS WHEREOF, the parties have executed this agreement as of [EFFECTIVE DATE] _______________.

COMPANY:

Blocpower Energy Services 3 LLC

*Founder Signature*

Name: [FOUNDER_NAME]

Title: [FOUNDER_TITLE]

Read and Approved (For IRA Use Only):

INVESTOR:

[ENTITY NAME]

By: _______________

*Investor Signature*

By: _______________

Name: [INVESTOR NAME]

Title: [INVESTOR TITLE]

The Investor is an “accredited investor” as that term is defined in Regulation D promulgated by the Securities and Exchange Commission under the Securities Act.

Please indicate Yes or No by checking the appropriate box:

[ ] Accredited

[ X ] Not Accredited

SIGNATURE PAGE

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# Appendix 1

## Note

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# Appendix 1

# Note

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF EFFECTIVE REGISTRATION STATEMENTS UNDER SUCH ACT AND STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE DEBTOR THAT SUCH REGISTRATION IS NOT REQUIRED.

# BlocPower Energy Services 3 LLC

# NOTE

Amount: $[AMOUNT]

Date: [EFFECTIVE DATE]

FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, BlocPower Energy Services 3 LLC, a Delaware limited liability company (the "Company"), hereby shall pay, at any time on or after the earlier of (i) any Optional Redemption Date (ii) the Mandatory Redemption Date, to [EFFECTIVE DATE] (the "Holder") the principal sum of $[AMOUNT] or such lesser principal amount then outstanding, together with all accrued and unpaid interest thereon as set forth below. This Note is being issued in connection with the Notes Offering (as defined in the Subscription Agreement) by Company in an amount of up to $3,150,000, pursuant to the terms of certain Subscription Agreements (the "Subscription Agreements") by and between Company and the Holder, and the other lenders. Terms not defined herein shall have the meanings set forth in the Note Subscription Agreements between the Company and the Holder, and other lenders who have executed similar Note Subscription Agreements.

Section 1. Interest. Interest on the principal amount of this Note will accrue from and including the date hereof until and including the date such principal amount is paid, at a rate equal to five and one-half percent (6.50%) per annum, without compounding. Principal and interest shall be payable in lawful money of the United States of America, in immediately available funds, at the principal office of the Holder or at such other place as the legal holder may designate from time to time in writing to the Company. Interest shall be computed on the basis of a 365-day year, for the actual days elapsed. Notwithstanding any other provision of this Note, the Holder hereof does not

dc-1132399

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intend to charge, and the Company shall not be required to pay, any interest or other fees or charges in excess of the maximum permitted by applicable law; any payments in excess of such maximum shall be refunded to the Company or credited to reduce principal hereunder.

**Section 2. Terms and Method of Payment.** The Notes constitute a general unsecured and unsubordinated obligation of the Company. The Company will repay principal and interest on the Notes to the Holder at the close of business on May 1st (the "**Payment Date**") each year until the Maturity Date.

The Company may, at its option, pay this Note in whole or in part prior to the Maturity Date without the prior approval or consent of the Holder (an "**Optional Prepayment**"), provided that the Company shall prepay, on the consummation of a Change of Control (the "**Mandatory Redemption Payment Date**"), all outstanding principal and accrued interest on the Notes (a "**Mandatory Redemption**"). The Company will use its best efforts to provide the Holder with at least fifteen (15) days' prior notice to any Optional Prepayment (an "**Optional Prepayment Date**"). On each Optional Prepayment Date and the Mandatory Redemption Date, each payment will consist of (i) the outstanding principal subject to such prepayment; (ii) accrued and outstanding interest on such principal subject to such prepayment; and (iii) a prepayment penalty equal to five percent (5%) of the outstanding principal subject to such prepayment. To the extent that prepayments are made, such prepayments will be applied to all Notes, pro rata, based on the total outstanding principal balance of all outstanding Notes.

As used in this Note, the term "**Change of Control**" means (i) the sale or other disposition of all or any substantial portion of the assets or equity securities of the Company; (ii) a change in ownership of more than fifty percent (50%) of the issued and outstanding voting securities of the Company; or (iii) any merger or reorganization of the Company, except a merger in which the persons owning a majority of the issued and outstanding voting securities of the Company prior to such merger or reorganization retain more than fifty percent (50%) of the combined voting power of the resulting entity.

If any Payment Date, the Maturity Date, any Optional Prepayment Date, or Mandatory Redemption Date falls on a day that is not a business day, the required payment will be made on the next succeeding business day and no interest on such payment will accrue in respect of the delay. All payments shall be made to the Holder on the Record Date with respect to such payment, as reflected on the books and records of the Company.

dc-1132399

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As used herein, (i) "Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in The City of New York, New York are authorized by law to close and (ii) "Record Date" means, with respect to any Payment Date (whether or not it is a Business Day), the Business Day that is five (5) Business Days prior to such Payment Date.

## Rank and Limitation on Liens

The Notes are unsecured and unsubordinated obligations of payment of the Company; that is, there are no existing debt obligations of the Company that would get paid ahead of the Note holders. As a result of being unsecured, in the event of a liquidation of the Company, the holders of the Notes will have a junior position to claims from trade creditors and taxing authorities.

While the Notes are outstanding, the Company will not permit or create any liens on its assets other than liens for the purchase price money liens of/for future property acquired in the ordinary course of business, or those associated with contractors during project construction.

## Financial Covenants

The Company will maintain, at all times, a minimum of six months debt service in cash or cash equivalents in its operating accounts. The Company shall only dividend cash to its parent company at a point in time when it has the minimum six month debt service reserve in its operating accounts and has a minimum debt service coverage ratio of 1.2.

The Company will use no more than 40% of funds raised for loans or equity investments to other BlocPower Project Cos.

Section 3. Events of Default. The occurrence of any of the following events shall constitute an event of default in the Notes (an "Event of Default"): (i) the Company is past due on payment of principal or interest for a period of five (5) days or more (ii) the Company has breached a covenant and failed to cure such breach in thirty (30) days; (iii) any representation or warranty of the Company was untrue when made (iv) the Company is adjudicated bankrupt or insolvent under the federal bankruptcy laws or any similar jurisdiction; or (v) the Company has instituted proceedings to be adjudicated as a voluntary bankruptcy or file a petition seeking reorganization or an arrangement with creditors under the federal bankruptcy laws, or any similar applicable federal or state law, or shall make an assignment for the benefit of creditors. Upon the occurrence of an Event of Default, any Holder may, by written notice to the Company, declare the unpaid principal amount of their Notes, and interest accrued thereon, to be due and payable.

dc-1132399

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**Section 4. Remedies upon Default.** Upon the occurrence and during the continuance of an Event of Default, Holders may petition the Company for the Notes to become due and payable immediately. If the Company receives such petitions from Holders owning more than 30% of the outstanding principal of the Notes, Company shall pay all outstanding principal and interest on the Notes without further demand. Upon the occurrence and during the continuance of an Event of Default, interest will accrue at 7.5%.

**Section 5. Miscellaneous.** This Note applies to, inures to the benefit of, and binds the successors and assigns of the parties hereto. This Note is made under and shall be governed by and construed in accordance with the internal laws of the State of Delaware. This Note may be amended, substituted, altered, waived, modified or extended, and the Note may be substituted, extended, converted or exchanged, by the written consent of the Company and the Holder.

[Signature page follows.]

**IN WITNESS WHEREOF**, the Company has executed this Note as an instrument under seal as of the date first written above.

ATTEST:

BLOCKPOWER ENERGY SERVICES 3, LLC

Investor Signature

By: Founder Signature

Note holder signature

[INVESTOR NAME]

Note Holder Name

dc-1132399

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## Appendix 2 Offering Disclosure Documents

The Form C and all Offering Disclosure documents are available on the SEC EDGAR database.

Type in BlocPower Energy Services 3, LLC in the "company and person lookup" box.

The Company's Offering page that can be found on www.wefunder.com has a Q & A Section for Crowd and Company Live questions and answers!

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## Appendix 3 Restrictions on the Transfer or Sale Of Securities

### Within the First Year after the Purchase

During the period of one year from when the securities were issued, the securities generally may not be resold, pledged or transferred unless: (1) to the issuer of the securities; (2) to an 'accredited investor'; (3) as part of an offering registered with the U.S. Securities and Exchange Commission; or (4) to a member of the family of the purchaser or the equivalent, to a trust controlled by the purchaser, to a trust created for the benefit of a member of the family of the purchaser or the equivalent, or in connection with the death or divorce of the purchaser or other similar circumstance.

The term 'accredited investor' means any person who comes within any of the categories set forth in Rule 501(a) of Regulation D, or who the seller reasonably believes comes within any of such categories, at the time of the sale of the securities to that person.

The term 'member of the family of the purchaser or the equivalent' includes a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law of the purchaser, and includes adoptive relationships.

The term 'spousal equivalent' means a cohabitant occupying a relationship generally equivalent to that of a spouse.

### Beyond the First Year after the Purchase

At any time after one year from when the securities were issued, the securities may not be resold, pledged or transferred without the prior written consent of the Company, which consent shall not be unreasonably withheld if the holder thereof gives notice to the Company of such holder's intention to effect such sale, pledge, or transfer, and

(a) there is in effect a registration statement under the Securities Act covering the proposed transaction; or

(b) such notice describes the manner and circumstances of the proposed sale, pledge, or transfer in sufficient detail and, if reasonably requested by the Company, is accompanied at such holder's expense by either (i) a written opinion of legal counsel who shall, and whose legal opinion shall, be reasonably satisfactory to the Company, addressed to the Company, to the effect that the proposed transaction may be effected without registration under the Securities Act; (ii) a 'no action' letter from the SEC to the effect that the proposed sale, pledge, or transfer of such securities without registration will not result in a recommendation by the staff of the SEC that action be taken with respect thereto; or (iii) any other evidence reasonably satisfactory to the Company to the effect that the proposed sale, pledge, or transfer of the securities may be effected without registration under the Securities Act.

dc-1132399

**Attachment 4:** `document_4.pdf`

# Balance Sheet

## BlocPower Energy Services 3 LLC

As of December 31, 2022

DEC 31, 2022

### Assets

#### Current Assets

##### Cash and Cash Equivalents

| ES3 Money Market Checking | 8,551 |
| --- | --- |
| ES3-Main Operating Checking | 343,433 |
| Total Cash and Cash Equivalents | 351,984 |

| Accounts Receivable | 374,985 |
| --- | --- |
| Due from BlocPower Community Corporation | 258,860 |
| Due from BlocPower ES1 | 163,467 |
| Due from BlocPower ES2 | 49,526 |
| Due from BlocPower LLC | 1,012,258 |
| Prepayments | 39,480 |
| Total Current Assets | 2,250,559 |

#### Long Term Assets

| Accumulated Depreciation | (31,387) |
| --- | --- |
| Construction In Process | 1,437,947 |
| Project Asset | 734,636 |
| Total Long Term Assets | 2,141,195 |

| Total Assets | 4,391,754 |
| --- | --- |

### Liabilities and Equity

#### Liabilities

##### Current Liabilities

| Accounts Payable | 264,373 |
| --- | --- |
| Retainage Payable | 48,500 |
| Sales Tax Payable | 2,381 |
| Total Current Liabilities | 315,254 |

##### Long Term Liabilities

| Accrued Interest | 100,137 |
| --- | --- |
| Deferred Revenue | 369,702 |
| EBCE Loan | 500,000 |
| Green Note - Crowdfunding - Allocated | 240,383 |
| Green Note - Crowdfunding - First Repay | (61,450) |
| Green Note - Crowdfunding First Round | 775,551 |
| Green Note - Crowdfunding Second Round | 948,799 |
| Green Note - Crowdfunding Third Round | 748,380 |
| Green Note - Debt Issuance Cost | (48,224) |

Investor Monthly Reporting Packet | BlocPower Energy Services 3 LLC

Balance Sheet

DEC 31, 2022

| Note - Merck Family Fund | 91,671 |
| --- | --- |
| Total Long Term Liabilities | 3,664,949 |
| Total Liabilities | 3,980,204 |
| Equity |  |
| Current Year Earnings | (65,427) |
| Owners Contribution | 20,000 |
| Project Sponsor Equity | 494,253 |
| Retained Earnings | (37,275) |
| Total Equity | 411,551 |
| Total Liabilities and Equity | 4,391,754 |

Investor Monthly Reporting Packet | BlocPower Energy Services 3 LLC

# Income Statement

BlocPower Energy Services 3 LLC

For the year ended December 31, 2022

2022

Income

| Interest Income | 63,479 |
| --- | --- |
| Sales | 33,235 |
| Total Income | 96,714 |

Gross Profit

96,714

Operating Expenses

| Bank Service Charges | 864 |
| --- | --- |
| Consulting & Accounting | 6,000 |
| Depreciation | 23,192 |
| Interest Expense | 4,000 |
| Interest Expense - First Round | 52,518 |
| Interest Expense - Second Round | 40,443 |
| Interest Expense - Third Round | 27,441 |
| Operation and Maintenance | 5,628 |
| Sales returns and allowances | 1,909 |
| Stripe-Credit Card Fee | 146 |
| Total Operating Expenses | 162,141 |

Operating Income

(65,427)

Net Income

(65,427)

Investor Monthly Reporting Packet | BlocPower Energy Services 3 LLC

# Statement of Cash Flows

BlocPower Energy Services 3 LLC

For the year ended December 31, 2022

2022

## Operating Activities

| Receipts from customers | 95,335 |
| --- | --- |
| Payments to suppliers and employees | (144,407) |
| Cash receipts from other operating activities | (50) |
| Net Cash Flows from Operating Activities | (49,122) |

## Investing Activities

| Other cash items from investing activities | (2,008,606) |
| --- | --- |
| Net Cash Flows from Investing Activities | (2,008,606) |

## Financing Activities

| Other cash items from financing activities | 2,236,414 |
| --- | --- |
| Net Cash Flows from Financing Activities | 2,236,414 |

| Net Cash Flows | 178,686 |
| --- | --- |

## Cash and Cash Equivalents

| Cash and cash equivalents at beginning of period | 173,297 |
| --- | --- |
| Net cash flows | 178,686 |
| Cash and cash equivalents at end of period | 351,984 |
| Net change in cash for period | 178,686 |

Investor Monthly Reporting Packet | BlocPower Energy Services 3 LLC

**Attachment 5:** `document_5.pdf`

# **BLOCPOWER PUBLIC BENEFIT CORPORATION  
AND SUBSIDIARIES**

**BROOKLYN, NEW YORK**

**AUDITED CONSOLIDATED FINANCIAL STATEMENTS**

**OTHER CONSOLIDATING FINANCIAL INFORMATION**

**AND**

**INDEPENDENT AUDITOR'S REPORTS**

**DECEMBER 31, 2021 AND 2020**

![img-0.jpeg](img-0.jpeg)

BUSINESS  
ADVISORS  
AND CPAS

# CONTENTS

| AUDITED FINANCIAL STATEMENTS | PAGE |
| --- | --- |
| Independent Auditor's Report | 3 |
| Consolidated Balance Sheets | 5 |
| Consolidated Statements of Operations | 7 |
| Consolidated Statements of Changes in Shareholders' Equity | 8 |
| Consolidated Statements of Cash Flows | 9 |
| Notes to Consolidated Financial Statements | 11 |
| OTHER CONSOLIDATING FINANCIAL INFORMATION |  |
| Independent Auditor's Report on Consolidating Financial Information | 25 |
| Consolidating Balance Sheets of BlocPower Public Benefit Corporation, BlocPower LLC, and the project specific LLCs | 26 |
| Consolidating Statements of Operations of BlocPower Public Benefit Corporation, BlocPower LLC, and the project specific LLCs | 28 |

![img-1.jpeg](img-1.jpeg)

BUSINESS  
ADVISORS  
AND CPAS

## INDEPENDENT AUDITOR'S REPORT

BluePower Public Benefit Corporation and Subsidiaries

### *Opinion*

We have audited the accompanying consolidated financial statements of BlocPower Public Benefit Corporation and Subsidiaries, which comprise the consolidated balance sheets as of December 31, 2021 and 2020, and the related consolidated statements of operations, changes in shareholders' equity, and cash flows for the years then ended, and the related notes to the consolidated financial statements.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of BlocPower Public Benefit Corporation and its subsidiaries as of December 31, 2021 and 2020, and the results of their operations and their cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

### *Basis for Opinion*

We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of BlocPower Public Benefit Corporation and Subsidiaries, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

### *Responsibilities of Management for the Financial Statements*

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

- 3 -

Canandaigua + Elmira + Latham + Queensbury + Rochester  
An Independent Member of the BDO Alliance USA

WE VALUE YOUR FUTURE

In preparing the consolidated financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about BlocPower Public Benefit Corporation and Subsidiaries' ability to continue as a going concern for one year after the date that the consolidated financial statements are available to be issued.

#### *Auditor's Responsibilities for the Audit of the Financial Statements*

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the consolidated financial statements.

In performing an audit in accordance with GAAS, we:

- Exercise professional judgment and maintain professional skepticism throughout the audit.
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of BlocPower Public Benefit Corporation and Subsidiaries' internal control. Accordingly, no such opinion is expressed.
- Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the consolidated financial statements.
- Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about BlocPower Public Benefit Corporation and Subsidiaries' ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Rochester, New York
January 25, 2023

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WE VALUE YOUR FUTURE

# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# CONSOLIDATED BALANCE SHEETS

|  | December 31, |  |
| --- | --- | --- |
| ASSETS | 2021 | 2020 |
| CURRENT ASSETS |  |  |
| Cash and cash equivalents | $10,969,078 | $6,345,260 |
| Accounts receivable | 298,453 | 192,756 |
| Prepaid expenses | 92,815 | - |
| TOTAL CURRENT ASSETS | 11,360,346 | 6,538,016 |
| PROPERTY AND EQUIPMENT |  |  |
| Leased equipment | 1,182,623 | 763,843 |
| Construction in progress | 1,735,975 | 32,565 |
|  | 2,918,598 | 796,408 |
| Less accumulated depreciation | (54,506) | (15,079) |
|  | 2,864,092 | 781,329 |
| OTHER ASSETS | 343,750 | 375,000 |

| $14,568,188 | $7,694,345 |
| --- | --- |

The accompanying notes are an integral part of the financial statements.

- 5 -

# LIABILITIES AND SHAREHOLDERS' EQUITY

December 31,

| 2021 | 2020 |
| --- | --- |

# CURRENT LIABILITIES

| Current portion of long-term debt | 2,094,713 | 17,645 |
| --- | --- | --- |
| Line of credit | 341,669 | - |
| Accounts payable | 3,068,330 | 278,462 |
| Accrued expenses | 429,145 | 241,171 |
| Deferred revenue | 1,898,401 | 282,157 |
| Other current liabilities | - | 1,742 |
| TOTAL CURRENT LIABILITIES | 7,832,258 | 821,177 |

# OTHER LIABILITIES

| Long-term debt, net of unamortized debt issuance costs of $91,726 at December 31, 2021 | 1,324,250 | 332,504 |
| --- | --- | --- |
| Due to shareholder | 35,106 | 39,614 |
|  | 1,359,356 | 372,118 |

# SHAREHOLDERS' EQUITY

| Class A common stock, $.00001 par value; |  |  |
| --- | --- | --- |
| Authorized, 7,416,088 shares at December 31, 2021 and 2020 |  |  |
| Issued and outstanding, 2,666,667 at December 31, 2021 and 2020 | 27 | 27 |
| Series A-1 preferred stock, $.00001 par value; |  |  |
| Authorized, 2,234,687 shares at December 31, 2021 and 2020 |  |  |
| Issued and outstanding, 1,881,648 shares at December 31, 2021 and 2020 | 19 | 19 |
| Series A-2 preferred stock, $.00001 par value; |  |  |
| Authorized, issued and outstanding, 256,322 shares at December 31, 2021 and 2020 (with a liquidation preference for all preferred stock of $12,863,759 at December 31, 2021 and 2020) | 3 | 3 |
| Series A-3 preferred stock, $.00001 par value; |  |  |
| Authorized, issued and outstanding, 1,451,198 shares at December 31, 2021 and 2020 | 15 | 15 |
| Additional paid-in capital | 12,769,323 | 12,769,323 |
| SAFE notes convertible | 5,286,469 | - |
| Accumulated deficit | (12,679,282) | (6,268,337) |
|  | 5,376,574 | 6,501,050 |
|  | $14,568,188 | $7,694,345 |

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# CONSOLIDATED STATEMENTS OF OPERATIONS

|  | Year ended December 31, |  |
| --- | --- | --- |
|  | 2021 | 2020 |
| Revenues: |  |  |
| Contract revenues | $16,443,456 | $677,099 |
| Lease revenues | 89,949 | 40,254 |
|  | 16,533,405 | 717,353 |
| Cost of revenues | 14,593,116 | 554,943 |
| GROSS PROFIT | 1,940,289 | 162,410 |
| General and administrative expenses | 8,651,016 | 3,491,866 |
| LOSS FROM OPERATIONS | (6,710,727) | (3,329,456) |
| Other income (expense): |  |  |
| Other income | 430,669 | 102,880 |
| Interest income | 2,249 | 2,621 |
| Interest expense | (109,936) | (37,123) |
|  | 322,982 | 68,378 |
| LOSS BEFORE TAXES | (6,387,745) | (3,261,078) |
| Income and franchise tax expense | 23,200 | 7,734 |
| NET LOSS | $(6,410,945) | $(3,268,812) |

The accompanying notes are an integral part of the financial statements.

- 7 -

# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE YEAR ENDED DECEMBER 31, 2021 AND 2020

|  | Class A Common Stock |  | Series A-1 Preferred Stock |  | Series A-2 Preferred Stock |  | Series A-3 Preferred Stock |  | Additional paid-in capital | Accumulated deficit | SAFE Notes Convertible | Total |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount |  |  |  |  |
| BALANCE AT JANUARY 1, 2020 | 2,666,667 | $27 | - | $ - | - | $ - | - | $ - | $60 | $(2,999,525) | $3,835,000 | $835,562 |
| SAFE Notes convertible issued | - | - | - | - | - | - | - | - | - | - | 1,450,000 | 1,450,000 |
| SAFE Notes converted to equity | - | - | - | - | 256,322 | 3 | 1,451,198 | 15 | 5,284,982 | - | (5,285,000) | - |
| Note Payable converted to Preferred Stock | - | - | 9,479 | - | - | - | - | - | 38,178 | - | - | 38,178 |
| Issuance of Preferred Stock, net of $93,873 of issuance costs | - | - | 1,872,169 | 19 | - | - | - | - | 7,446,103 | - | - | 7,446,122 |
| Net loss | - | - | - | - | - | - | - | - | - | (3,268,812) | - | (3,268,812) |
| BALANCE AT DECEMBER 31, 2020 | 2,666,667 | 27 | 1,881,648 | 19 | 256,322 | 3 | 1,451,198 | 15 | 12,769,323 | (6,268,337) | - | 6,501,050 |
| SAFE Notes convertible issued | - | - | - | - | - | - | - | - | - | - | 5,286,469 | 5,286,469 |
| Net loss | - | - | - | - | - | - | - | - | - | (6,410,945) | - | (6,410,945) |
| BALANCE AT DECEMBER 31, 2021 | 2,666,667 | $27 | 1,881,648 | $19 | 256,322 | $3 | 1,451,198 | $15 | $12,769,323 | $(12,679,282) | $5,286,469 | $5,376,574 |

The accompanying notes are an integral part of the financial statements.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# CONSOLIDATED STATEMENTS OF CASH FLOWS

|  | Year ended December 31, |  |
| --- | --- | --- |
|  | 2021 | 2020 |
| CASH FLOWS - OPERATING ACTIVITIES |  |  |
| Net loss for the year | $(6,410,945) | $(3,268,812) |
| Adjustments to reconcile net loss to net cash used for operating activities: |  |  |
| Depreciation and amortization | 39,427 | 15,079 |
| Amortization of debt issuance costs included in interest expense | 36,065 | - |
| Security deposit charged to lease expense | - | 33,344 |
| Accrued interest converted to equity | - | 13,178 |
| Changes in certain assets and liabilities affecting operations: |  |  |
| Accounts receivable | (105,697) | (46,384) |
| Prepaid expenses | (92,815) | (4,424) |
| Accounts payable and accrued expenses | 2,977,842 | 457,919 |
| Other current liabilities | (1,742) | - |
| Deferred revenue | 1,616,244 | 282,157 |
| NET CASH USED FOR OPERATING ACTIVITIES | (1,941,621) | (2,517,943) |
| CASH FLOWS - INVESTING ACTIVITIES |  |  |
| Purchase of property and equipment | (2,122,190) | (628,408) |
| NET CASH USED FOR INVESTING ACTIVITIES | (2,122,190) | (628,408) |
| CASH FLOWS - FINANCING ACTIVITIES |  |  |
| Repayments on due to shareholder | (4,508) | (25,000) |
| Borrowings of long term debt | 3,182,682 | 771,609 |
| Net borrowings on line of credit | 341,669 | - |
| Debt issuance costs incurred in connection with long term debt | (96,541) | (375,000) |
| Payments on long-term debt | (22,142) | (550,668) |
| Proceeds from borrowings on convertible SAFE notes | 5,286,469 | 1,450,000 |
| Proceeds from capital contributions, net | - | 7,446,122 |
| NET CASH PROVIDED FROM FINANCING ACTIVITIES | 8,687,629 | 8,717,063 |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 4,623,818 | 5,570,712 |
| Cash and cash equivalents at beginning of year | 6,345,260 | 774,548 |
| CASH AND CASH EQUIVALENTS AT END OF YEAR | $10,969,078 | $6,345,260 |

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# CONSOLIDATED STATEMENTS OF CASH FLOWS, Cont'd

|  | Year ended December 31, |  |
| --- | --- | --- |
|  | 2021 | 2020 |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION |  |  |
| Cash paid during the year for: |  |  |
| Income and franchise taxes | $23,200 | $7,734 |
| Interest | $109,936 | $23,945 |
| NON-CASH INVESTING AND FINANCING ACTIVITIES |  |  |
| SAFE Notes converted to Series A-2 and Series A-3 preferred shares | $ - | $5,285,000 |
| Note payable and accrued interest converted to Series A-1 preferred shares | $ - | $38,178 |

The accompanying notes are an integral part of the financial statements.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2021 AND 2020

# NOTE A: THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

# The Company

BlocPower Public Benefit Corporation and Subsidiaries (the “Company”) was established in the state of Delaware on December 12, 2013 for the purpose of fundraising and operating as a holding company.

BlocPower LLC (“BlocPower”), a wholly-owned subsidiary of the Company, is a Brooklyn-based climate/energy technology startup that assists customers to find innovative energy solutions to improve building energy costs and consumption as well as utilizing proprietary software for analysis, leasing, project management, and monitoring of urban clean energy projects. In 2021, BlocPower also contracted with the City of New York to develop and manage a precision training and hiring initiative. BlocPower is wholly-owned by the Company. At the parent level, the Company maintains the investment in BlocPower, which is eliminated in consolidation. BlocPower has multiple wholly-owned subsidiaries (single member LLCs) that are set up to function as special purpose entities which acquire, hold, and lease or sell clean energy efficient heating and air conditioning equipment: BlocPower Energy Services 1 LLC (“ES1”), BlocPower Energy Services 1A LLC (“ES1A”), and BlocPower Energy Services 2 LLC (“ES2”). In January 2021, BlocPower Energy Services 3 LLC (“ES3”), a single member LLC, was formed and is wholly-owned by BlocPower. ES1A has not had any activity as of December 31, 2021. In September 2021, BuildingBloc LLC (“BuildingBloc), a single member LLC, was formed and is wholly-owned by BlocPower. BuildingBloc had minimal activity and did not commence operations during the year ended December 31, 2021. BlocPower maintains investments in the above-cited single member LLCs, which are eliminated in consolidation.

# Principles of consolidation

The financial statements present the consolidated financial position, statements of operations, shareholders’ equity, and cash flows of BlocPower Public Benefit Corporation and Subsidiaries. Substantially all intercompany balances and transactions have been eliminated.

# Revenue recognition

The Company recognizes revenues from professional and managed services provided. The Company recognizes revenues under the guidance in Accounting Standards Codification Topic 606, Revenues from Contracts with Customers (“ASC 606”).

The core principle of ASC 606 is that an entity should recognize revenues for the services equal to an amount it expects to be entitled to receive for those services. The Company accounts for a contract under ASC 606 when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are established, the contract has commercial substance, and collectability of consideration is probable.

The Company enters into contracts with customers for the utilization of its proprietary software for analysis, to manage projects, and monitoring of projects. Revenues for these contracts are recognized over time. When contracts with customers contain multiple performance obligations, the Company accounts for individual performance obligations separately if they are distinct. The transaction price is allocated to each distinct performance obligation on a relative stand alone sales price (“SSP”) basis. The Company determines the SSP by using the price charged for a deliverable when sold separately or uses management’s best estimate of SSP for goods or services not sold separately using estimation techniques that maximize observable data points, including: internal factors relevant to its pricing practices such as costs and margin objectives; stand alone sales prices of similar products; pricing policies; percentage of the fee charged for a primary product or service relative to a related product or service; and customer segment and geography. Contracts with customers generally run between 1 month and 36 months. The payment terms and conditions in customer contracts are typically 30 days from completion of the performance obligation.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE A: THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cont'd

The Company has entered into a significant cost-reimbursement contract with a customer in 2021. The Company recognizes revenues as the Company incurs expenditures for the contract. Qualifying expenditures that have been incurred but are yet to be reimbursed are reported as accounts receivable in the accompanying consolidated balance sheets. Amounts received prior to incurring qualifying expenditures are reported as deferred revenue in the accompanying consolidated balance sheets.

# Contract balances

Contract assets consist of accounts receivable and contract liabilities consist of deferred revenues. Contract assets and liabilities are summarized as follows:

|  | Years ended December 31, |  |  |
| --- | --- | --- | --- |
|  | 2021 | 2020 | 2019 |
| Accounts receivable | $298,453 | $192,756 | $152,500 |
| Contract Liabilities: |  |  |  |
| Deferred revenue | $1,898,401 | $282,157 | $ - |

# Lease revenue

The Company recognizes lease revenues from equipment on a straight-line basis in accordance with the terms of the operating lease agreements. The excess of accrued straight-line rents over billings is reflected as deferred lease receivable in the accompanying consolidated balance sheets. There were no deferred lease receivables at December 31, 2021 and 2020.

# Other income

Other income mainly consists of grants from foundations or government programs to help fund fellowship/internship programs at the Company as well as incentive revenues from outside parties relating to projects or contracts the Company has engaged in. These revenues are not part of the Company's normal operations and future amounts are undeterminable.

# Cash and cash equivalents

Cash and cash equivalents are maintained at several financial institutions located in the United States and are insured by the FDIC up to $250,000 at each institution. In the normal course of business, the cash and cash equivalents account balances at any given time may exceed insured limits. However, the Company has not experienced any losses in such accounts and does not believe it is exposed to significant risk in cash and cash equivalents.

# Accounts receivable

The Company has receivables that arise from customer contracts as the Company meets performance obligations and bills the customer and from billings to customers, leasing equipment from the Company and from cost-reimbursement contracts. Management reviews accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible and will establish an allowance for doubtful accounts as needed. After all attempts to collect a receivable have failed, the receivable is written off to bad debt expense. Based on the information available, the Company believes no allowance for doubtful accounts is necessary at December 31, 2021 and 2020.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE A: THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cont'd

# Property and equipment

The Company's property and equipment consists of leased equipment. As agreed upon within customer lease agreements, the Company develops technology or other assets and then leases the assets to customers. Property and equipment are recorded at cost. Depreciation and amortization are computed using the straight-line method over the estimated useful lives of the leased equipment which is generally twenty-five years. Major renewals and betterments are capitalized, while replacements, repairs and maintenance, which do not improve or extend the life of the respective assets, are charged to operations as incurred. Upon sale or retirement, the related costs and accumulated depreciation are removed from the accounts and the related gain or loss is reflected in other income. Depreciation expense for the years ended December 31, 2021 and 2020 was $39,427 and $15,079, respectively.

# Construction in progress

During the development and construction period of leased equipment, the assets are recorded on BlocPower as construction in progress. At the time of completion, the asset is contributed to the single member LLC that will lease the equipment to the customer. The Company has not entered into any commitments with vendors for the construction of the leased equipment at December 31, 2021 and 2020 and is not required to use any specified vendor for construction.

# Debt issuance costs

The Company accounts for debt issuance costs under ASU 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs". ES2 entered into a credit agreement in December 2020 and incurred debt issuance costs of $375,000. The debt issuance costs are stated at cost and are amortized over the term of the debt. As there have only been $100,000 of borrowings on the credit agreement, the debt issuance costs have been included in other assets in the accompanying consolidated balance sheet. ES2 began making additional draws on the credit agreement during 2022 and will then show net (unamortized) debt issuance costs as a deduction from the carrying amount of the debt on the accompanying consolidated balance sheets.

During the period of January 4, 2021 to June 30, 2021, ES3 raised capital through an offering of unsecured Climate Impact Notes to various investors. This transaction incurred debt issuance costs of $50,688. BlocPower entered into a loan agreement in October 2021 and incurred debt issuance costs of $45,853. The debt issuance costs are stated at cost and are amortized over the term of the debt. The net unamortized debt issuance costs are shown as a deduction from the carrying amount of the debt on the accompanying consolidated balance sheets.

# Deferred revenue

The Company records contract payments received as deferred revenue until the amounts are expended for the purpose of the contracts, at which time it is recognized as contract revenues.

# Due to shareholder

Due to shareholder of $35,106 and $39,614 as of December 31, 2021 and 2020, respectively, consists of advances or payments made on behalf of a Company by the shareholder. There are no set repayment terms.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE A: THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Cont'd

# Advertising expenses

Advertising and promotional costs are expensed as incurred. The Company's advertising and promotional expenses were was approximately $820,000 and $186,000 for the years ended December 31, 2021 and 2020, respectively, and is included in general and administrative expenses in the accompanying consolidated statement of operations.

# Income taxes

Deferred income tax assets and liabilities arise from temporary differences associated with differences between the financial statement and tax basis of assets and liabilities, as measured by the enacted tax rates which are expected to be in effect when these differences reverse. The principal types of temporary differences between assets and liabilities for financial statement and tax return purposes are detailed in Note G.

The Company is taxed under the provisions of the Internal Revenue Code and applicable state tax laws. The Company files tax returns in the U.S. federal jurisdiction and in New York State. With few exceptions, as of December 31, 2021, the Company is no longer subject to U.S. federal or state income tax examinations by tax authorities for years ended prior to December 31, 2018. The tax returns for the years ended December 31, 2018 through 2021 are still subject to potential audit by the IRS and the taxing authorities in applicable states. Management of the Company believes it has no material uncertain tax positions and, accordingly, it has not recognized any liability for unrecognized tax benefits.

# Use of estimates in the preparation of financial statements

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

# New accounting pronouncement - leases

In February 2016, the FASB issued a new standard related to leases to increase transparency and comparability among entities by requiring the recognition of right-of-use ("ROU") assets and lease liabilities on the consolidated balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases under current U.S. GAAP. For nonpublic entities, the FASB voted on May 20, 2020, to extend the guidance in this new standard to be effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The Company is currently evaluating the provisions of this standard to determine the impact the new standard will have on the Company's financial position or results of operations.

# Subsequent events

The Company has conducted an evaluation of potential subsequent events occurring after the balance sheet date through January 25, 2023, which is the date the financial statements are available to be issued. No subsequent events requiring disclosure were noted except for those discussed above and in Note C, Note D, Note E, Note H, and Note K.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE B: OPERATING LEASES

The Company is the lessor of clean energy efficient heating and air conditioning equipment under various operating leases expiring through 2036. As of December 31, 2021, the lease agreements with customers entered into through 2021 that are in service provide for payments of total base rents of $8,552 per month, and also contain certain escalation clauses. The company has entered into seventeen lease agreement with customers during 2021 that have not yet commenced as of December 31, 2021. The Company is still building the equipment for these leases which is included in construction in progress in the accompanying consolidated balance sheet. When the equipment has been completed and installed at the customers' locations, the lease agreements will commence.

Minimum future lease payments to be received on non-cancelable leases as of December 31, 2021 are approximately as follows:

| Years ending December 31, | Amount |
| --- | --- |
| 2022 | $103,182 |
| 2023 | 104,214 |
| 2024 | 105,256 |
| 2025 | 106,308 |
| 2026 | 107,372 |
| Thereafter | 1,007,462 |
|  | $1,533,794 |

# NOTE C: LINE OF CREDIT

On January 11, 2021, BlocPower entered into a $500,000 line of credit with a bank which bore interest at 2.50% available through January 2022. At December 31, 2021 there were outstanding borrowings on the line of $341,669. The line of credit was not renewed in January 2022 and the balance was repaid in full.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE D: LONG-TERM DEBT

Long-term debt consists of the following:

|  | December 31, |  |
| --- | --- | --- |
|  | 2021 | 2020 |
| BlocPower |  |  |
| Loan payable to a bank entered into on October 6, 2021 which allowed for term loans to be drawn from October 6, 2021 through January 31, 2022 up to a maximum aggregate principal amount of $2,000,000. Loan payable accrues interest at the greater of 3.25% or the Wall Street Journal Prime Rate (effective rate of 3.25% at December 31, 2021). Commencing in February 2022, loan payable requires monthly principal installments of $55,556 plus accrued interest through January 2025. 1 | $2,000,000 | $ - |
| ES1 |  |  |
| Credit agreement with an investment company entered into on December 23, 2019 which allows for term loans to be drawn in order to finance projects relating to the development of air-source heat pump and/or cooling systems and related installation, up to a maximum aggregate principal amount of $1,000,000. The aggregate borrowings accrue interest at a fixed interest rate of 8.50% per annum which requires monthly payments of approximately $4,300 through June 2030. Secured by all assets of ES1. 2, 3 | 313,439 | 250,149 |
| ES2 |  |  |
| Credit agreement with an investment company entered into on December 10, 2020. The agreement allows for term loans to be drawn to finance equipment and installation costs for energy efficiency retrofits to be installed in commercial, residential and community buildings, up to an aggregate principal amount of $10,000,000 through December 10, 2023. Outstanding borrowings on the credit agreement relate to debt issuance costs. Credit agreement requires quarterly payments of accrued interest on the loan with the principal due at the loan maturity date of December 10, 2032. The Company has the ability to request that the lender increase its loan commitment to a maximum of $50,000,000 provided certain criteria are met. The aggregate borrowings accrue interest at a fixed interest rate of 8.50%; this rate can be reduced to 7.75% in certain circumstances if the Company maintains a stipulated debt service coverage ratio. ES2 has pledged all of its assets as collateral in the event of default. 4, 5 | 100,000 | 100,000 |
| Balance forward | 2,413,439 | 350,149 |

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

# DECEMBER 31, 2021 AND 2020

NOTE D: LONG-TERM DEBT, Cont'd

|  | December 31, |  |
| --- | --- | --- |
|  | 2021 | 2020 |
| Balance forward | $2,413,439 | $350,149 |
| ES3 |  |  |
| Multiple subscription agreements with various investors on May 28, 2021 in which unsecured debt notes, Climate Impact Notes, were offered and sold at various dollar amounts up to a maximum aggregate principal balance of $1,000,000. The aggregate borrowings accrue interest at a fixed interest rate of 5.50% per annum which requires annual payments of $115,728 of principal and interest to be made each May through May 2033. | 997,250 | - |
| Promissory note with a foundation entered into on November 30, 2021 for $100,000 due in annual installment payments of $12,330 beginning on December 31, 2022 through December 31, 2031. The promissory note accrues interest at a fixed rate of 4.0% per annum. | 100,000 | - |
|  | 3,510,689 | 350,149 |
| Less unamortized debt issuance costs | 91,726 | - |
| Less current portion of long-term debt | 2,094,713 | 17,645 |
|  | $1,324,250 | $332,504 |

1 On September 19, 2022, the Company entered into a loan agreement with an investment company, which required that the $2,000,000 loan and all accrued interest be repaid in full. The $2,000,000 loan was repaid in full on September 19, 2022.
2 The credit agreement requires compliance with certain covenants. At December 31, 2021, the Company was in compliance with all such covenants after receipt of a letter from the investment company dated December 16, 2022.
3 In March 2022, an additional draw of approximately $261,000 was made on the credit agreement which extended the maturity date through November 2031 and requires updated monthly principal and interest payments of approximately $7,626. These subsequent borrowings have not been reflected in the future maturities of long-term debt table below.
4 The credit agreement includes certain restrictive covenants. At December 31, 2021, the Company was in compliance with all such covenants after receipt of a letter from the investment company dated January 25, 2023.
5 In April 2022, the Company drew approximately $523,000 on the credit agreement. The subsequent borrowings have not been reflected in the future maturities of long-term debt table below.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE D: LONG-TERM DEBT, Cont'd

At December 31, 2021, maturities of long-term debt are as follows:

| Years ending December 31, | Amount |
| --- | --- |
| 2022 | $2,094,713 |
| 2023 | 101,112 |
| 2024 | 107,487 |
| 2025 | 114,290 |
| 2026 | 121,552 |
| Thereafter | 971,535 |
|  | $3,510,689 |

# NOTE E: SHAREHOLDERS' EQUITY

# Common stock

At December 31, 2021 there were 7,416,088 shares of Class A common stock authorized and there were 2,666,667 shares issued and outstanding of Class A common stock. At December 31, 2021 there were 1,535,403 shares of Class B common stock authorized and there were no shares issued and outstanding of Class B common stock. The holders of the Class A common stock are entitled to one vote for each share of Class A common stock and are subject to and qualified by the rights, powers and preferences of the holders of preferred stock. The holders of the Class B common stock have no voting rights, except as required by law. Upon liquidation, dissolution, or winding up of the Company, after payment of all preferential amounts required to be paid to the holders of preferred stock, the remaining assets available for distribution to the stockholders will be distributed among the common stock holders pro rata based on the number of shares held.

# Convertible preferred stock

On September 11, 2020, the Company entered into a Series A Preferred Stock Purchase Agreement with various parties. As part of the purchase agreement the Company agreed to sell and issue to each purchaser Series A-1 preferred stock for $4.0274 per share, Series A-2 preferred stock for $2.3798 per share, and Series A-3 preferred stock for $3.2219 per share. 1,872,169 shares of Series A-1 preferred stock were purchased as part of this agreement. As part of the agreement the Company converted a note payable and all related unpaid accrued interest totaling $38,178 to an Organization for 9,479 shares of Series A-1 preferred stock. The Company had entered into various Simple Agreements for Future Equity ("SAFE") notes during the year ended December 31, 2019 and during 2020 which were converted into Series A-2 and A-3 preferred stock as part of the purchase agreement. $610,000 of SAFE notes were converted to 256,322 Series A-2 preferred stock shares and $4,675,000 of SAFE notes were converted to 1,451,198 Series A-3 preferred stock shares.

During 2021, the Company entered into sixteen SAFE notes totaling $5,286,469 which are eligible to be converted to a number of shares of the Safe Preferred Stock equal to the purchase amount divided by the conversion price per the SAFE agreement. As of December 31, 2021, these SAFE notes have not been converted.

During July 2022 through September 2022, the Company entered into seven SAFE notes totaling $10,109,500, which are eligible to be converted to a number of shares of the Safe Preferred Stock equal to the purchase amount divided by the conversion price per the SAFE agreement.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE E: SHAREHOLDERS' EQUITY, Cont'd

# Series A-1

At December 31, 2021 and 2020, there were 2,234,687 shares of voting preferred stock authorized and 1,881,648 shares issued and outstanding. If the Company were to declare, pay, or set aside any dividends on shares, the holders of Series A-1 preferred stock shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A-1 preferred stock in an amount at least equal to the number of outstanding shares if converted into Class A Common Stock or at a rate per share of preferred stock determined by dividing the amount of the dividend payable on each share of Series A-1 preferred stock divided by the original issuance price of the class, as defined in the Amended and Restated Certificate of Incorporation, and then multiplying such fraction by an amount equal to the original issuance price as defined in the Amended and Restated Certificate of Incorporation.

Holders of Series A-1 preferred stock are entitled to the number of votes equal to the number of whole shares of common stock into which shares of preferred stock are convertible. Series A-1 preferred stock is voluntarily convertible to common stock at any time without additional consideration and is determined by dividing the original issue price by the conversion price as defined in the amended and restated certificate of incorporation in effect at that time. Series A-1 preferred stock conversion rights are terminated in the event of a liquidation, dissolution, winding up of the Company, or a deemed liquidation event.

Upon liquidation, dissolution or winding up, as defined in the Amended and Restated Certificate of Incorporation, holders of Series A-1, A-2, and A-3 preferred stock shall be entitled to be paid out of the assets available for distribution on a side by side basis and before distribution to holders of common stock an amount equal to the original issue price plus all dividends declared and unpaid at that time.

# Series A-2

At December 31, 2021 and 2020, there were 256,322 shares authorized, issued and outstanding of Series A-2 preferred stock. If the Company were to declare, pay, or set aside any dividends on shares, the holders of Series A-2 preferred stock shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A-2 preferred stock in an amount at least equal to the number of outstanding shares if converted into Class A Common Stock or at a rate per share of preferred stock determined by dividing the amount of the dividend payable on each share of Series A-2 preferred stock divided by the original issuance price of the class, as defined in the Amended and Restated Certificate of Incorporation, and then multiplying such fraction by an amount equal to the original issuance price as defined in the Amended and Restated Certificate of Incorporation.

Holders of Series A-2 preferred stock are entitled to the number of votes equal to the number of whole shares of common stock into which shares of preferred stock are convertible. Series A-2 preferred stock is voluntarily convertible to common stock at any time without additional consideration and is determined by dividing the original issue price by the conversion price as defined in the amended and restated certificate of incorporation in effect at that time. Series A-2 preferred stock conversion rights are terminated in the event of a liquidation, dissolution, winding up of the Company, or a deemed liquidation event.

Upon liquidation, dissolution or winding up, as defined in the Amended and Restated Certificate of Incorporation, holders of Series A-1, A-2, and A-3 preferred stock shall be entitled to be paid out of the assets available for distribution on a side by side basis and before distribution to holders of common stock an amount equal to the original issue price plus all dividends declared and unpaid at that time.

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# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE E: SHAREHOLDERS' EQUITY, Cont'd

# Series A-3

At December 31, 2021 and 2020, there were 1,451,198 authorized, issued and outstanding shares of Series A-3 preferred stock. If the Company were to declare, pay, or set aside any dividends on shares, the holders of Series A-3 preferred stock shall first receive, or simultaneously receive, a dividend on each outstanding share of Series A-3 preferred stock in an amount at least equal to the number of outstanding shares if converted into Class A Common Stock or at a rate per share of preferred stock determined by dividing the amount of the dividend payable on each share of Series A-3 preferred stock divided by the original issuance price of the class, as defined in the Amended and Restated Certificate of Incorporation, and then multiplying such fraction by an amount equal to the original issuance price as defined in the Amended and Restated Certificate of Incorporation.

Holders of Series A-3 preferred stock are entitled to the number of votes equal to the number of whole shares of common stock into which shares of preferred stock are convertible. Series A-3 preferred stock is voluntarily convertible to common stock at any time without additional consideration and is determined by dividing the original issue price by the conversion price as defined in the amended and restated certificate of incorporation in effect at that time. Series A-3 preferred stock conversion rights are terminated in the event of a liquidation, dissolution, winding up of the Company, or a deemed liquidation event.

Upon liquidation, dissolution or winding up, as defined in the Amended and Restated Certificate of Incorporation, holders of Series A-1, A-2, and A-3 preferred stock shall be entitled to be paid out of the assets available for distribution on a side by side basis and before distribution to holders of common stock an amount equal to the original issue price plus all dividends declared and unpaid at that time.

# NOTE F: STOCK OPTIONS

The Company's 2014 Stock Plan (the 'Plan') was approved by the Board of Directors in 2014. Under this Plan which was most recently amended on September 11, 2020, the maximum number of shares to be issued is 1,535,403 of Class B Common Shares. At December 31, 2021 and 2020, there were no stock options outstanding under this Plan. The exercise price of an incentive stock option cannot be less than the fair market value of the common stock on the date granted and the term of an incentive stock option is limited to ten years. The exercise price of a non-statutory stock option shall be such price as is determined by the Board of Directors, provided that, if the per share exercise price is less than 100% of the fair market value of the common stock on the date granted, it shall otherwise comply with all applicable laws and the term of a nonqualified stock option is limited to ten years.

On December 10, 2020 the Company issued warrants for 124,149 shares of Series A-1 Preferred Stock at a price of $4.03 per share. The warrants expire December 9, 2030.

- 20 -

# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

# DECEMBER 31, 2021 AND 2020

# NOTE G: INCOME TAXES

In past years, the Company has incurred operating losses which have not resulted in recorded tax benefits. The amount of net operating loss carryforwards to be used in any one year may be limited by certain provisions of the Internal Revenue Code. The Company also has state net operating loss carryforwards available, the utilization of which may be similarly limited. At December 31, 2021, the Company has federal and state net operating loss carryforwards of approximately $12,000,000 which can be carried forward indefinitely. The Company has established a full valuation allowance with respect to these federal and state loss carryforwards.

The significant components of the Company's deferred tax assets and liabilities are as follows:

|  | December 31, |  |
| --- | --- | --- |
|  | 2021 | 2020 |
| Deferred tax assets: |  |  |
| Net operating loss carryforwards | $3,200,000 | $1,500,000 |
| Valuation allowance for net deferred tax assets | (3,200,000) | (1,500,000) |
|  | $ - | $ - |

# NOTE H: COMMITMENTS

In January 2020, the Company entered into an agreement for office space through January 2025. A security deposit of approximately $33,500 was paid in connection with this agreement. The lease included an escalating annual base rent amount for each year of the lease term. During 2020, no rent was paid in relation to this lease due to a free-rent period followed by a rent relief period (in response to COVID-19). On April 30, 2021, the lease was terminated, and the premise was vacated. In compliance with the terms of the lease termination, the Company forfeited the security deposit. Additionally, the Company was required to pay a lump sum of approximately $36,500 for rent expense. The security deposit was written off to rent expense and the remaining amount was accrued for at December 31, 2020 and paid during the year ended December 31, 2021.

The Company pays rent for various other office spaces, as needed, however, there are no long-term rental agreements in place as of December 31, 2021. Rent expense for the years ended December 31, 2021 and 2020 were approximately $4,300 and $93,000, respectively.

On August 1, 2022, the Company entered into a lease agreement for space in Bronx, NY through July 31, 2023. The lease requires monthly rental payments of $25,000 and contains a one year renewal option. On September 1, 2022, BlocPower entered into a lease agreement for additional space in Brooklyn, NY through August 2023. The lease requires monthly rental payments of $16,000 per month. Minimum rent expense under these two leases is $189,000 for the year ending December 31, 2022 and $303,000 for the year ending December 31, 2023.

- 21 -

# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE I: MAJOR CUSTOMERS AND VENDORS

During the years ended December 31, 2021 and 2020, the Company had revenue from customers which accounted from more than 10% of total revenues as follows:

|  | December 31, |  |
| --- | --- | --- |
|  | 2021 | 2020 |
| Customer A | * | 35% |
| Customer B | * | 31% |
| Customer C | * | 29% |
| Customer D | 87% | * |

* Less than 10% of revenues

Accounts receivable from the major customers amounted to approximately $-0- and $181,800 at December 31, 2021 and 2020.

During the year ended December 31, 2021, the Company had purchases from one vendor which accounted for approximately 14% of costs of revenues. The Company did not have purchases from any one vendor which accounted for more than 10% of revenues during the year ended December 31, 2020.

# NOTE J: FINANCIAL IMPACT OF COVID-19 OUTBREAK AND RELATED GOVERNMENT PROGRAMS

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for future years.

In response to the COVID-19 outbreak, in April 2020, the Company applied for and was approved by a bank for a loan of $414,800 through the Paycheck Protection Program (“PPP”) established by the Small Business Administration. The loan had a maturity of 2 years and an interest rate of 1%. The loan had the potential for forgiveness provided certain requirements were met by the Company. The loan was funded on April 22, 2020. On December 10, 2020, the Company repaid the loan in full including the principal and accrued interest as of that date.

Also in response to the COVID-19 outbreak, in June 2020, the Company applied for and was approved by a bank for a loan of $127,600 through the Economic Injury Disaster Program established by the Small Business Administration. The loan had a stated interest rate of 3.75%. Payments were deferred for 12 months but accrued interest. The loan principal was repaid in full on November 2020 and the accrued interest was repaid in December 2020.

- 22 -

# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Cont'd

DECEMBER 31, 2021 AND 2020

# NOTE K: SUBSEQUENT EVENT

On September 19, 2022, the Company entered into a loan agreement with an investment company, which makes available to the Company a loan in the amount of $130,000,000 through October 28, 2024. The maximum outstanding principal balance of the loan is the lesser of $12,000,000 or the advance rate as defined in the agreement. The loan bears interest at the Secured Overnight Financing Rate plus 3.25% per annum. On October 14, 2022 approximately $2,576,500 was drawn on the loan and on December 1, 2022 an additional draw of approximately $650,700 was made. The loan agreement requires the principal amount of the loan, together with all accrued and unpaid interest due on the maturity date of October 28, 2024.

# NOTE L: MANAGEMENTS PLAN

The Company experienced a net loss of $6,410,945 during the year ended December 31, 2021 and has an accumulated deficit of $12,769,323. During 2022 the Company was able to raise $10,109,500 in SAFE notes as described in Note E. The Company has also entered into a loan agreement allowing them to draw and maintain a maximum balance of $12,000,000 to fund operations as described in Note K.

In addition, the commercial building sector, of which the great majority are small buildings, consumes about 20-30% of all U.S. energy. Decarbonizing or electrifying these buildings by the removal of fossil fuels is a significant opportunity particularly with rising fossil fuel prices and volatility and heat pump and other incentives in the recently enacted Inflation Reduction Act. For example, to electrify Ithaca, New York, population of about 30,000, hundreds of millions of dollars in investment can be justified. Extrapolated to the dozens of major cities and thousands of minor cities yields a cost potentially in the trillions of dollars to electrify all the buildings in the United States. Management believes that is what must be done if the country is to move away from fossil fuels.

To meet this electrification challenge, BlocPower has developed an end-to-end platform by identifying gaps and providing solutions with the following business lines: a) software / program management; b) project installation / financing; and c) workforce training.

Based on years of experience, BlocPower is well-positioned to deliver electrification projects in the fragmented small commercial, multi-residential, and LMI markets, which have seen limited competition to date. This combined with some years of public policy experience associated with decarbonization and electrification has enabled the Company to sign a number of major contracts with cities and utilities in 2022, including New York City, San Jose, California, Ithaca, New York, Denver, Colorado and large investor owed utility, Commonwealth Edison in Chicago, as well as unannounced work.

To execute these programs, BlocPower has raised approximately $25 million dollars in a Series B fundraising from a strong group of strategic and venture investors including VoLo Earth, Obsidian, Microsoft, Credit Suisse and Builders Vision. Management plans to focus on delivering on these programs, growing software and financing transactions, and improving repeatability. The proceeds from Series B investment, will drive these efforts and include investment in additional working capital. This expected growth in operations ahead of revenue growth, will likely drive future operating losses and capital raising, but is intended to establish significant market share and a consistent revenue base.

Management believes the additional amounts raised will allow the Company to expand its business and fund operations for the next twelve months.

- 23 -

# **BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES**

# **OTHER CONSOLIDATING FINANCIAL INFORMATION**

![img-0.jpeg](img-0.jpeg)

BUSINESS  
ADVISORS  
AND CPAS

# INDEPENDENT AUDITOR'S REPORT ON CONSOLIDATING FINANCIAL INFORMATION

# Shareholders

BlocPower Public Benefit Corporation and Subsidiaries

We have audited the consolidated financial statements of BlocPower Public Benefit Corporation and Subsidiaries as of and for the years ended December 31, 2021 and 2020 and we have issued our report thereon dated January 25, 2023, which contained an unmodified opinion on those consolidated financial statements. Our audit was conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The 2021 consolidating financial information hereinafter is presented for purposes of additional analysis and is not a required part of the consolidated financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

*Mengel, Metzger, Barr & Co. LLP*

Rochester, New York January 25, 2023

- 25 -

Canandaigua + Elmira + Latham + Queensbury + Rochester  
An Independent Member of the BDO Alliance USA

WE VALUE YOUR FUTURE

BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

CONSOLIDATING BALANCE SHEETS

| ASSETS | BlocPower Public Benefit Corp. | BlocPower LLC | BlocPower Energy Services 1 LLC | BlocPower Energy Services 2 LLC | BlocPower Energy Services 3 LLC | BuildingBloc LLC | Eliminations | Consolidated Totals December 31, |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  | 2021 | 2020 |
| CURRENT ASSETS |  |  |  |  |  |  |  |  |  |
| Cash and cash equivalents | $1,275,797 | $8,923,917 | $84,355 | $486,211 | $173,298 | $25,500 | $ - | $10,969,078 | $6,345,260 |
| Accounts receivable, net of allowance for doubtful accounts | - | 298,453 | - | - | - | - | - | 298,453 | 192,756 |
| Prepaid expenses | - | 86,335 | - | - | 6,480 | - | - | 92,815 | - |
| TOTAL CURRENT ASSETS | 1,275,797 | 9,308,705 | 84,355 | 486,211 | 179,778 | 25,500 | - | 11,360,346 | 6,538,016 |
| PROPERTY AND EQUIPMENT |  |  |  |  |  |  |  |  |  |
| Leased equipment | - | - | 834,739 | - | 347,884 | - | - | 1,182,623 | 763,843 |
| Construction in progress | - | 1,150,323 | 2,500 | 161,321 | 421,831 | - | - | 1,735,975 | 32,565 |
|  | - | 1,150,323 | 837,239 | 161,321 | 769,715 | - | - | 2,918,598 | 796,408 |
| Less accumulated depreciation | - | - | (46,311) | - | (8,195) | - | - | (54,506) | (15,079) |
|  | - | 1,150,323 | 790,928 | 161,321 | 761,520 | - | - | 2,864,092 | 781,329 |
| OTHER ASSETS |  |  |  |  |  |  |  |  |  |
| Other assets | - | - | - | 343,750 | - | - | - | 343,750 | 375,000 |
| Due to/from related parties | (107,092) | 222,200 | (86,689) | (441,908) | 413,489 | - | - | - | - |
| Investment in subsidiaries | 16,868,954 | 1,219,655 | - | - | - | - | (18,088,609) | - | - |
|  | 16,761,862 | 1,441,855 | (86,689) | (98,158) | 413,489 | - | (18,088,609) | 343,750 | 375,000 |
|  | $18,037,659 | $11,900,883 | $788,594 | $549,374 | $1,354,787 | $25,500 | $(18,088,609) | $14,568,188 | $7,694,345 |

- 26 -

# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# CONSOLIDATING BALANCE SHEETS, Cont'd

| LIABILITIES AND SHAREHOLDERS' EQUITY | BlocPower Public Benefit Corp. | BlocPower LLC | BlocPower Energy Services 1 LLC | BlocPower Energy Services 2 LLC | BlocPower Energy Services 3 LLC | BuildingBloc LLC | Eliminations | Consolidated Totals December 31, |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  | 2021 | 2020 |
| CURRENT LIABILITIES |  |  |  |  |  |  |  |  |  |
| Current portion of long-term debt | $ - | $2,000,000 | $25,949 | $ - | $68,764 | $ - | $ - | $2,094,713 | $17,645 |
| Line of credit | - | 341,669 | - | - | - | - | - | 341,669 | - |
| Accounts payable | 14,235 | 2,862,614 | - | 100,000 | 91,481 | - | - | 3,068,330 | 278,462 |
| Accrued expenses | - | 393,651 | 27 | - | 35,467 | - | - | 429,145 | 241,171 |
| Deferred revenue | - | 1,901,180 | (500) | - | (2,279) | - | - | 1,898,401 | 282,157 |
| Other current liabilities | - | - | - | - | - | - | - | - | 1,742 |
| TOTAL CURRENT LIABILITIES | 14,235 | 7,499,114 | 25,476 | 100,000 | 193,433 | - | - | 7,832,258 | 821,177 |
| OTHER LIABILITIES |  |  |  |  |  |  |  |  |  |
| Long-term debt, net of unamortized debt issuance costs | - | (43,502) | 287,490 | 100,000 | 980,262 | - | - | 1,324,250 | 332,504 |
| Due to shareholder | - | 35,106 | - | - | - | - | - | 35,106 | 39,614 |
|  | - | (8,396) | 287,490 | 100,000 | 980,262 | - | - | 1,359,356 | 372,118 |
| SHAREHOLDERS' EQUITY |  |  |  |  |  |  |  |  |  |
| Class A common stock, $0.00001 par value; |  |  |  |  |  |  |  |  |  |
| Authorized, 7,416,088 shares at December 31, 2021 |  |  |  |  |  |  |  |  |  |
| Issued and outstanding, 2,666,667 at December 31, 2021 | 27 | - | - | - | - | - | - | 27 | 27 |
| Series A-1 preferred stock, $0.00001 par value; |  |  |  |  |  |  |  |  |  |
| Authorized, 2,234,687 shares at December 31, 2021 |  |  |  |  |  |  |  |  |  |
| Issued and outstanding, 1,881,648 shares at December 31, 2021 | 19 | - | - | - | - | - | - | 19 | 19 |
| Series A-2 preferred stock, $0.00001 par value; |  |  |  |  |  |  |  |  |  |
| Authorized, issued and outstanding, 256,322 shares at December 31, 2021 | 3 | - | - | - | - | - | - | 3 | 3 |
| Series A-3 preferred stock, $0.00001 par value; |  |  |  |  |  |  |  |  |  |
| Authorized, issued and outstanding, 1,451,198 shares at December 31, 2021 | 15 | - | - | - | - | - | - | 15 | 15 |
| Additional paid-in capital | 12,769,323 | - | - | - | - | - | - | 12,769,323 | 12,769,323 |
| SAFE note convertible | 5,286,469 | - | - | - | - | - | - | 5,286,469 | - |
| Capital contributions - related parties | - | 16,868,954 | 475,792 | 500,000 | 218,363 | 25,500 | 18,088,609 | - | - |
| Accumulated deficit | (32,432) | (12,458,789) | (164) | (150,626) | (37,271) | - | - | (12,679,282) | (6,268,337) |
|  | 18,023,424 | 4,410,165 | 475,628 | 349,374 | 181,092 | 25,500 | 18,088,609 | 5,376,574 | 6,501,050 |
|  | $18,037,659 | $11,900,883 | $788,594 | $549,374 | $1,354,787 | $25,500 | $18,088,609 | $14,568,188 | $7,694,345 |

- 27 -

# BLOCPOWER PUBLIC BENEFIT CORPORATION AND SUBSIDIARIES

# CONSOLIDATING STATEMENTS OF OPERATIONS

|  | BlocPower Public Benefit Corp | BlocPower LLC | BlocPower Energy Services 1 LLC | BlocPower Energy Services 2 LLC | BlocPower Energy Services 3 LLC | BuildingBloc LLC | Eliminations | Consolidated Totals December 31 |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  | 2021 | 2020 |
| Revenues: |  |  |  |  |  |  |  |  |  |
| Contract revenues | $ - | $16,443,456 | $ - | $ - | $ - | $ - | $ - | $16,443,456 | $677,099 |
| Lease revenues | - | - | 76,225 | - | 13,724 | - | - | 89,949 | 40,254 |
| GROSS REVENUE | - | 16,443,456 | 76,225 | - | 13,724 | - | - | 16,533,405 | 717,353 |
| Cost of revenue | - | 14,593,116 | - | - | - | - | - | 14,593,116 | 554,943 |
| GROSS PROFIT | - | 1,850,340 | 76,225 | - | 13,724 | - | - | 1,940,289 | 162,410 |
| General and administrative expenses | 18,400 | 8,456,427 | 52,242 | 109,633 | 14,314 | - | - | 8,651,016 | 3,491,866 |
| (LOSS) INCOME FROM OPERATIONS | (18,400) | (6,606,087) | 23,983 | (109,633) | (590) | - | - | (6,710,727) | (3,329,456) |
| Other income (expense): |  |  |  |  |  |  |  |  |  |
| Other income | - | 430,669 | - | - | - | - | - | 430,669 | 102,880 |
| Interest income | - | 2,249 | - | - | - | - | - | 2,249 | 2,621 |
| Interest expense | - | (8,834) | (26,229) | (38,192) | (36,681) | - | - | (109,936) | (37,123) |
|  | - | 424,084 | (26,229) | (38,192) | (36,681) | - | - | 322,982 | 68,378 |
| LOSS BEFORE TAXES | (18,400) | (6,182,003) | (2,246) | (147,825) | (37,271) | - | - | (6,387,745) | (3,261,078) |
| Income and franchise tax expense | 18,850 | 4,350 | - | - | - | - | - | 23,200 | 7,734 |
| NET LOSS | $(37,250) | $(6,186,353) | $(2,246) | $(147,825) | $(37,271) | $ - | $ - | $(6,410,945) | $(3,268,812) |

- 28 -

**Attachment 6:** `document_6.pdf`

Contact

www.linkedin.com/in/kasunic
(LinkedIn)

Top Skills

Investments

Finance

Valuation

Languages

French

# Cullen Kasunic

Energy Efficiency and Renewable Energy Finance Leader

New York, New York, United States

## Summary

Unlocking new cleantech asset classes with finance

Media:

https://cleancapital.com/2021/08/experts-only-podcast-96-with-energy-efficiency-expert-cullen-kasunic/

https://climatenow.com/net-zero-cities-event-series/

https://www.washingtonpost.com/climate-solutions/2021/11/03/ithaca-new-york-decarbonize-electrify/

https://www.commercialsearch.com/news/greening-an-entire-city-the-ithaca-model/

https://aap.cornell.edu/news-events/donnel-baird-cullen-kasunic-blocpower

## Experience

BlocPower

4 years 2 months

Project Finance Officer

August 2022 - Present (8 months)

New York, United States

Head of Project Finance for the company.

Lead all project finance activities: source, negotiate, and maintain finance facilities. Manage team of analysts and associates. Develop financial products. Work closely with the business development and service delivery teams to see that projects get sold, built, and are profitable.

Chief Financial Officer / Head Of Project Finance

February 2019 - August 2022 (3 years 7 months)

Greater New York City Area

Executive responsible for all finance related issues for the company.

Lead the establishment, operation and expansion of company project finance platforms.

Integrate financing into the fabric of the company through engagement with sales and software teams.

Page 1 of 5

# PSEG

Solar Loan Underwriter (Project Finance and Large Commercial)

March 2017 - February 2019 (2 years)

Greater New York City Area

Contract position with the PSE&G Solar Loan team to perform credit review, underwrite, and structure primarily project financed large commercial DG solar transactions. Request and receive documentation, review financials, propose deal structures, develop term sheets, consider/mitigate risks, prepare credit recommendations, and secure approvals. Transactions range from 150kW to over 4MW. Loan clients include major retail, real estate, and logistics companies, with projects originated by leading national and regional solar developers.

# Kasunic Consulting

Principal Consultant (Project Finance/Product Development)

February 2014 - February 2019 (5 years 1 month)

Greater New York City Area

Project finance and product development consulting practice focused on investors and growing businesses in renewable energy, efficiency, and clean technology.

Clients have included:

- Generate Capital: Evaluated investments in energy storage, solar thermal, biomass, car charging and multifamily energy efficiency for a $300M infrastructure company specializing in project finance driven Energy, Food, and Water investments.
- Sealed: Developed a unique project finance structure to allow single family homeowners to pay-as-they-save for basic home energy efficiency improvements such as insulation and air sealing. Secured first $5M for this brand new asset class.
- FertileMind Capital: Performed investment valuations on wind, solar, and hydro assets owned by utilities, including TransAlta, Alterra, and Atlantic Power. Compared the utilities' green energy infrastructure to their fossil fuel assets.
- Other Projects: Assisted numerous solar and wind developers to understand tax equity financing. Built data and analysis systems for a leading solar installer in NYC. Created energy plans for a budding vertical farming company.

Page 2 of 5

Bright Power, Inc.

Product Manager

July 2015 - March 2017 (1 year 9 months)

Manage the strategic direction of Bright Power's energy and financial analysis software products, including Energy Scorecards. Conceive, design, and prototype new analysis tools. Responsible for proactive outreach throughout the company, and central point of contact for new feature requests. Tasked with conceptualizing new directions for product development company-wide. Reports to VP of software development, with broad interaction company-wide.

United Wind

VP Analysis, Finance & Product; Co-founder

October 2009 - February 2014 (4 years 5 months)

Lead the creation of financial and technical products for premier distributed wind lease developer. Oversee the project evaluation process, taking into account system cost, wind resource, finance terms, and customer price.

Manage the sourcing, structuring, and analysis of project finance. Design, construct, operate and improve United Wind's custom wind energy and financial analysis tools. Directly manage two project finance analysts, a UI designer, a software developer, and external software consultants..

- Instrumental in securing tax equity funding for company, and developing tax credit driven finance models, through collaboration with groups including Novogradac, Wilson Sonsini, and Round Rock, plus alumni of SolarCity and SunEdison
- Formed internal project finance analysis department: built systems, defined processes, and hired staff. Interfaced directly with: tax and sponsor equity providers; construction and long term debt; technology providers and strategic partners; government policy and permitting entities; customers, EPCs and system installers.
- Led the creation and commercialization of proprietary distributed wind resource assessment methodology, Wind Analytics. Coordinated the activities of key technical experts, including atmospheric scientists, wind engineers and software developers.
- Conceived and specified full product designs and features. Oversaw the development of software products using ESRI web services, Microsoft .NET, and Silverlight technologies

Page 3 of 5

United Wind was formed from a merger between Wind Products and Talco in 2013.

# Ecovative Design

Business Consultant

January 2009 - May 2009 (5 months)

Helped develop a customer base and refine offerings for this start-up company focused on creating sustainable product solutions from organically grown foam-like materials. As of late 2012 Ecovative has reached $500k per year revenue, has been featured in major media such as the New Yorker, and developed enterprise supplier arrangements with numerous large companies including Sealed Air and Steelcase.

Specific responsibilities included:

- Identify new market areas
- Refine product positioning
- Set up sales support systems such as forecasts, contact databases, and order management systems
- Provide input on transition of company technologies into products

# Broad Innovation Technology

Advisor

May 2008 - May 2009 (1 year 1 month)

Multifaceted role at a Chinese IT services company with major clients, including SinoPec and Bank of China.

I was responsible for planning and advising the company as they looked to establish a US location. The end goal is to develop business with US clients. I led the process to identify the right market and location, understand how to present themselves in the US, and how to find their first customers.

# Pitney Bowes Software

Sales Consultant - Education and Public Sector

January 2004 - February 2007 (3 years 2 months)

Took on sole responsibility for the Education sector of MapInfo Corporation, a global NASDAQ company that provides location intelligence software, maps, data and services. (MapInfo Corporation was later acquired by Pitney Bowes for $408m and became Pitney Bowes Software)

Responsibilities include:

Page 4 of 5

- Brought custom GIS projects to the company, then to completion
- Collaborated in scoping and design of custom developed spatial software applications
- Creatively applied and advanced product offerings into new market areas
- Drove revenue through independent sales activities, channel partner management, and field sales support. Personally closed $400,000 in annual sales while exploring new product areas, and coordinating team operations

## Education

Rensselaer Polytechnic Institute - The Lally School of Management
MBA, Technology Entrepreneurship · (2007 - 2009)

Rensselaer Polytechnic Institute
MBA, Technology Entrepreneurship · (2007 - 2009)

University at Albany, SUNY
BA, Geography/Urban Planning · (1998 - 2002)

Page 5 of 5

**Attachment 7:** `document_7.pdf`

Contact

www.linkedin.com/in/donnel-baird-blocpower (LinkedIn)

Top Skills

Public Speaking
Business Strategy
Strategic Planning

# Donnel Baird

Turning buildings into Teslas-Greener, healthier, + more valuable buildings to fight climate change. Family guy. BOD @ New York Federal Reserve Bank Advisory Board / NYC Tech / Sunrise Movement / Sierra Club

New York, New York, United States

## Summary

BlocPower makes buildings healthier, smarter, greener and more valuable. I am a Climate Tech Founder focused on building community wealth in underserved communities + averting climate disaster. Lessons learned from: software, sustainability, policy, financial innovation in the financially underserved real estate climate tech sector. Focused on: Climate Tech, fintech, Startups, Business Development, Marketing Strategy, Finance, Community Organizing, and Venture Capital. Columbia Business School MBA, Second District Board member at New York Federal Reserve Bank, Echoing Green Fellow

## Experience

BlocPower

Founder

July 2013 - Present (9 years 9 months)

Greater New York City Area

BlocPower is a smart buildings platform that markets, engineers, and finances renewable energy and energy efficiency technologies to buildings in underserved market segments. BlocPower partners with governments, utilities, building owners, and community members to generate energy bill savings and reduced carbon emissions, and generates financial returns and improved public health. At scale, our technology can lead to a 2-7% reduction in US GHG emissions in the next two to three years.

Jalia Ventures

Entrepreneur in Residence

June 2012 - December 2012 (7 months)

New York, New York

Due diligence

Corporate Strategy

Page 1 of 2

## SEIU

National Get Out The Vote Director

July 2012 - November 2012 (5 months)

Washington D.C. Metro Area

GOTV Director for SEIU in 2012 Presidential General Election.

## Change to Win Federation

National Field Director, Green Jobs

May 2009 - August 2011 (2 years 4 months)

Change to Win is a national labor federation that represents over 5 million workers.

Our team supports the Laborers International Union of North America in developing the workforce, training standards, performance standards, and financing models of the American residential energy efficiency industry.

## Obama for America

Pennsylvania Constituency Vote Director, Regional Field Director

August 2007 - December 2008 (1 year 5 months)

Regional Field Director: Led voter contact operations in 7 primaries.

Pennsylvania Constituency Vote Director: 1 of 6 senior staffers responsible for

Pennsylvania campaign operations in 2008 general election

## Education

Columbia Business School

MBA, Entrepreneurship/Entrepreneurial Studies · (2011 - 2013)

Duke University

History, Literature, African-American/Black Studies · (1999 - 2003)

Duke University

History, Political Science and Government · (1999 - 2003)

Page 2 of 2

**Attachment 8:** `document_8.pdf`

# OPERATING AGREEMENT
OF
BLOCPOWER ENERGY SERVICES 3 LLC

This Operating Agreement (this "Agreement") is entered into as of the 12th day of February, 2021, by and between BlocPower Energy Services 3 LLC, a Delaware limited liability company, (the "Company") and BlocPower LLC, of 63 Flushing Avenue, Building 212, Suite 507, Brooklyn, NY 11205 (the "Member").

## PRELIMINARY STATEMENTS

The Company was formed as a Delaware limited liability company under the laws of the State of Delaware by the filing of the Certificate of Organization with the Office of the Secretary of State of the State of Delaware on January 4, 2021.

The Company and the Member desire to set out fully their respective rights, obligations and duties with respect to the management and operation of the Company and its assets.

NOW THEREFORE, in consideration of the mutual covenants contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

## SECTION I
Defined Terms

The following capitalized terms shall have the meanings specified in this Section I. Other terms are defined in the text of this Agreement; and, throughout this Agreement, those terms shall have the meanings respectively ascribed to them.

"Act" means the Delaware Limited Liability Company Act as amended from time to time.

"Affiliated Person" shall mean any Person (i) which owns or is owned, in whole or in part, by the Member, one or more Managers, a trustee of the Member, or by a shareholder, beneficiary or trustee of a member or manager of the Member; (ii) which is the parent, subsidiary, or affiliate of the Member or of a member or manager of the Member; (iii) in which the Member or Manager or a member or manager of the Member has any interest whatsoever; or (iv) from which the Member or Manager shall receive any remuneration, directly or indirectly.

"Agreement" means this Operating Agreement, as amended from time to time.

"Assign" means, when used as a noun, any voluntary sale, hypothecation, pledge, assignment, attachment, or other transfer, and, when used as a verb, means voluntarily to sell, hypothecate, pledge, assign, or otherwise transfer.

11242523v2

“**Bankruptcy**” shall have the meaning given it in the Act.

“**Capital Contribution**” means any cash, services rendered or a promissory note or other obligation to contribute cash or property or to perform services, which a person contributes to the Company in his, her or its capacity as a member, net of liabilities assumed or to which the assets are subject.

“**Capital Proceeds**” means the net proceeds received by the Company arising from any capital event or transaction, after the repayment of loans to the Company and accounting for the costs and liabilities incurred by the Company in consummating the capital transaction and any reserves reasonably required to fund contingent or unmatured liabilities of the Company, all as determined by the Member in its sole discretion.

“**Cash Flow**” means all cash funds derived from operations of the Company (including interest received on reserves), without reduction for any non-cash charges, but less expenses of the Company as determined by the Member in its sole discretion, in connection with owning and operating the Property including, without limitation, management and other fees which the Company has agreed to pay to the Member or Affiliated Persons, the repayment of loans to the Company made by Affiliated Persons, reserves, escrows and other holdbacks and debt service on loans to the Company made by third parties who are not Affiliated Persons.

“**Company**” means BlocPower Energy Services 3 LLC.

“**Interest**” means a Person’s right to receive distributions from the Company.

“**Involuntary Withdrawal**” means, with respect to a Member, the death, insanity, expulsion, Bankruptcy or dissolution of the Member.

“**Manager**” means Cullen Kasunic, the manager of the Company, and any other Person who is subsequently appointed as a manager of the Company.

“**Member**” means BlocPower LLC and any Person who is subsequently admitted as a member of the Company.

“**Membership Interest**” means all of the rights of a Member in the Company, including a Member’s: (i) Interest; (ii) right to inspect the Company’s books and records; (iii) right to participate in the management of and vote on matters coming before the Company; and (iv) unless this Agreement or the Certificate of Organization provides to the contrary, right to act as an agent of the Company.

“**Person**” means and includes a natural person, partnership, whether general or limited and whether domestic or foreign, limited liability company, foreign limited liability company, trust, estate, association, corporation, custodian, nominee or any other individual or entity in its own or any representative capacity.

11242523v2

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"Voluntary Withdrawal" means a Member's resignation.

## SECTION II
Formation and Name; Office; Purpose; Term

2.1. Formation. The Company has been organized as a limited liability company pursuant to the Act and has caused the Certificate of Organization to be prepared and filed with the Office of the Secretary of State of the State of Delaware. The Member is hereby admitted as the sole member of the LLC.

2.2. Name of the Company. The name of the Company is "BlocPower Energy Services 3 LLC".

2.3. Purpose. The general character and purpose of the business of the Company (which business the Company may conduct on its own behalf or as a partner, shareholder, beneficiary or member of another entity) is (a) to provide energy technology for rapidly greening American cities, (b) to engage in any and all activities which are necessary or incidental to such purposes, and (c) to act for any other purpose permitted under the Act.

2.4. Term. The term of the Company began upon the filing of the Certificate of Organization with the Office of the Secretary of State of the State of Delaware, and shall continue in existence perpetually until terminated pursuant to Section VII of this Agreement.

2.5. Principal Office. The principal office of the Company shall be located at 63 Flushing Avenue, Building 212, Suite 507, Brooklyn, NY 11205, or at any other place designated by the Manager.

2.6. Statutory Agent. The name and address of the Company's registered agent in the State of Delaware is Corporation Service Corporation with an address of 251 Little Falls Drive, Wilmington, Delaware 19808.

2.7. Company Status as Entity Separate From Member. The Company shall be an entity separate and independent from the Member. In furtherance of the foregoing: (a) to the extent reasonably practicable, the Company shall be specifically identified as "BlocPower Energy Services 3 LLC" in all writings containing its name, including, without limitation, Company stationery, invoices, business cards and checks; (b) the Company's financial accounts shall be completely separate from those of the Member; (c) there shall be no commingling of the funds of the Company with those of the Member; (d) the Member shall not make use of funds of the Company for the Member's purposes; (e) the Company shall not use the funds of the Member for the Company's purposes; (f) neither the Member nor Company shall represent or imply to any person that the Member is personally liable for any obligation of the Company; (g) all assets owned by the Company, whether real or personal, tangible or intangible, shall be owned by the Company as an entity, and the Member shall not have any ownership of such assets individually; and (h) the Company cash and other assets, cash flow,

11242523v2

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insurance and other financial resources shall be sufficient to enable it to meet its reasonably foreseeable liabilities when due.

### SECTION III
Capital; Liability; Loans

3.1. Initial Capital Contribution. Upon the execution of this Agreement, the Member shall contribute to the Company any cash, services rendered or a promissory note or other obligation to contribute cash or property or to perform services in the amount set forth on Exhibit A, if any.
3.2. No Additional Capital Contributions Required. The Member shall not be required to contribute any additional capital to the Company. The Member shall have no personal liability for any obligation of the Company.
3.3. No Liability. The Member shall not be personally liable, directly or indirectly, including, without limitation, by way of indemnification, contribution, assessment or otherwise, for any debt, obligation, or liability of the Company, whether arising in contract, tort or otherwise, solely by reason of being a Member of the Company.
3.4. Loans. The Member may, at any time, make or cause one or more loans to be made to the Company from the Member or from any third party, including any Affiliated Person, in any amount and on such terms as determined by the Member.

### SECTION IV
Distributions

4.1. Distributions of Cash Flow and Capital Proceeds. Cash Flow and Capital Proceeds of the Company shall be distributed to the Member in such amounts and at such times as the Manager shall determine in its sole discretion.
4.2. Liquidation and Dissolution. If the Company is liquidated, the assets of the Company shall be distributed to the Member.

### SECTION V
Management

5.1. Power and Authority to Manage. Except as otherwise expressly provided herein or in the Act, the Company shall be managed by the Manager, and the Manager shall have full, exclusive and complete discretion, power and authority to manage, control, administer, and operate the business and affairs of the Company.
5.2. Activities and Contracts With Affiliated Persons. The Manager may, in the Manager's sole discretion, contract with "Affiliated Persons" for any purpose whatsoever, specifically including the acquisition or disposition of property, the provision

11242523v2

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of property management or consulting services and the borrowing of money as provided in Section 3.4.

## SECTION VI
Assignment of Interests and Withdrawal

6.1. Assignment. The Member shall have the right to assign all or a portion of such Member's Membership Interest and shall have the power to grant a transferee the right to become a Member.
6.2. Voluntary Withdrawal. The Member shall have the right or power to Voluntarily Withdraw from the Company.
6.3. Involuntary Withdrawal. Upon the occurrence of an Involuntary Withdrawal, the legal representative or other successor in interest to the Member may, at the election of such legal representative or other successor in interest, become a Member.

## SECTION VII
Dissolution, Liquidation, and Termination of the Company

7.1. Events of Dissolution. The Company shall be dissolved upon the happening of any of the following events:

7.1.1. upon the Involuntary Withdrawal of the Member, unless the legal representative or other successor in interest to the Member elects to become a Member within ninety (90) days following the Involuntary Withdrawal;

7.1.2. upon the Voluntary Withdrawal of the Member;
7.1.3. upon the consent of the Member; or
7.14. the entry of a decree of judicial dissolution under the Act.

7.2. Procedure for Winding Up and Distribution. If the Company is dissolved, its affairs shall be wound up. On winding up of the Company, the assets of the Company shall be distributed, first, to creditors of the Company, in satisfaction of the liabilities of the Company, and then to the Member in accordance with Section 4.2 of this Agreement.

## SECTION VIII
Bank Accounts; Books and Records, and Accounting

8.1. Bank Accounts. All funds of the Company shall be deposited in a bank account or accounts opened in the Company's name.

11242523v2

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8.2. Books and Records. The Manager shall keep or cause to be kept complete and accurate books and records of the Company and supporting documentation of transactions with respect to the conduct of the Company's business. The books and records shall be maintained in accordance with sound accounting practices and shall be available at the Company's principal office.

8.3. Annual Accounting Period. The annual accounting period of the Company shall be the calendar year and end each year on December 31.

## SECTION IX
General Provisions

9.1. Assurances. The Member shall execute all certificates and other documents and shall do all such filing, recording, publishing, and other acts as the Member deems appropriate to comply with the requirements of law for the formation and operation of the Company and to comply with any laws, rules, and regulations relating to the acquisition, operation, or holding of the property of the Company.

9.2. Applicable Law. All questions concerning the construction, validity, and interpretation of this Agreement and the performance of the obligations imposed by this Agreement shall be governed by the internal law, not the law of conflicts, of the State of Delaware.

9.3 Section Titles. The section titles herein are inserted as a matter of convenience only and do not define, limit, or describe the scope of this Agreement or the intent of the provisions hereof.

9.4. Binding Provisions. This Agreement is binding upon, and inures to the benefit of, any party hereto and his respective heirs, executors, administrators, personal and legal representatives, successors, and permitted assigns.

9.5. Jurisdiction and Venue. Any suit involving any dispute or matter arising under this Agreement may only be brought in the United States District Court for the District of Delaware or any Delaware state court having jurisdiction over the subject matter of the dispute or matter.

9.6. Terms. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the Person may in the context require.

9.7. Separability of Provisions. Each provision of this Agreement shall be considered separable; and if, for any reason, any provision or provisions herein are determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those portions of this Agreement which are valid.

9.8. Tax Treatment. The Company shall be disregarded for federal and state income tax purposes.

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9.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall comprise one and the same instrument. Delivery of a copy of this Agreement or such other document bearing an original signature by facsimile transmission, by electronic mail in .pdf form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

[Signature Page Follows]

11242523v2

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**IN WITNESS WHEREOF**, the undersigned has executed, or caused this Operating Agreement to be executed, under seal, as of the date set forth hereinabove.

**COMPANY:**

**BLOCPOWER ENERGY SERVICES 3 LLC**

By: BlocPower LLC, its sole member

By:

Name: Donnel Baird
Title: CEO

**MEMBER:**

**BLOCPOWER LLC**

By:

Name: Donnel Baird
Title: CEO

11242523v2

*[Signature Page to LLC Operating Agreement]*

# EXHIBIT A

NAME OF MEMBER

BlocPower LLC

PERCENTAGE INTEREST

100%

11242523v2

**Attachment 9:** `document_9.pdf`

Hi Edward,

We appreciate your previous BlocPower project support and wanted to make sure you were one of the first to know we are gauging interest in a new Community Round on the investment platform Wefunder.

With our recent announcement of a public-private partnership with Menlo Park, CA-targeting 10,000+ buildings electrified by 2030-it is as important as ever that we have support from investors like you to finance this urgent work. Here's a recent testimonial from a BlocPower customer for whom affordable financing was critical to their project.

Together we can help communities continue to take critical climate action while bridging the gap created by the Supreme Court decision curtailing the power of the EPA. You can read more about the terms of this new offering and reserve a spot to be an investor here.

Sincerely,
Jon

-
Jon Moeller, COO
www.blocpower.ca

"We are 'testing the waters' to gauge investor interest in an offering under Regulation Crowdfunding. No money or other consideration is being solicited. If sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and only through Wefunder's platform. Any indication of interest involves no obligation or commitment of any kind."

BlocPower, 1623 Flatbush Avenue, Box #222, Brooklyn, New York 11210, United States
Unsubscribe, Merely, @BlocPower

## Can you vouch for John Doe?

John has applied to raise funding for Company Name on Wefunder and provided your name as a personal reference.

Quote goes here

Wefunder has raised hundreds of millions for startups that later went on to raise over $5 billion in follow-on funding from venture capitalists.

Can you vouch for John?

VOUCH FOR JOHN

LEARN MORE

### About Wefunder

We help anyone invest as little as $100 in the startups they believe in. We're also a Public Benefit Corporation with a mission to keep the American dream alive. We aim to help 20,000 founders get off the ground by 2029.

Unsubscribe | About | Education

Wefunder Inc. runs wefunder.com and is the parent company of Wefunder Advisors LLC and Wefunder Portal LLC. Wefunder Advisors is an exempt reporting adviser that advises SPVs used in Reg D offerings. Wefunder Portal is a funding portal (CRD #283503) that operates sections of wefunder.com where some Reg Crowdfunding offerings are made. Wefunder, Inc. operates sections of wefunder.com where some Reg A offerings are made. Wefunder, Inc. is not regulated as either a broker-dealer or funding portal and is not a member of FINRA.

Company Name is testing the waters to evaluate investor interest. No money or other consideration is being solicited; if sent, it will not be accepted. No offer to buy securities will be accepted. No part of the purchase price will be received until a Form C is filed and, then, only through Wefunder. Any indication of interest has no obligation or commitment of any kind.

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Name of Issuer:** Blocpower Energy Services 3 LLC

**Legal Status:** Limited Liability Company

**Jurisdiction of Incorporation/Organization:** DE

**Date of Organization:** 01-04-2021

**Physical Address:** 1623 Flatbush Ave, Brooklyn, NY, 11210

**Issuer Website:** http://bpes3.blocpower.io

**Is there a Co-Issuer?:** No

**Intermediary Name:** Wefunder Portal LLC

**Intermediary CIK:** 0001670254

**Intermediary File Number:** 007-00033

**Intermediary CRD Number:** 283503

### Offering Information

**Compensation to Intermediary:** 5.0% of the offering amount upon a successful fundraise, and be entitled to reimbursement for out-of-pocket third party expenses it pays or incurs on behalf of the Issuer in connection with the offering.

**Financial Interest in Issuer:** No

**Type of Security Offered:** Debt

**Price per Security:** $1.00

**Method for Determining Price:** Pro-rated portion of the total principal value of $50,000; interests will be sold in increments of $1.

**Target Offering Amount:** $50,000.00

**Oversubscription Accepted:** Yes

**Oversubscription Allocation Type:** Other

**Description of Oversubscription:** As determined by the issuer

**Maximum Offering Amount:** $3,150,000.00

**Deadline to Reach Target Amount:** 04-30-2023

### Annual Report Disclosure Requirements

**Current Number of Employees:** 2

**Total Assets (Most Recent Fiscal Year):** $4,391,754.00

**Total Assets (Prior Fiscal Year):** $0.00

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $351,984.00

**Cash & Cash Equivalents (Prior Fiscal Year):** $0.00

**Accounts Receivable (Most Recent Fiscal Year):** $374,985.00

**Accounts Receivable (Prior Fiscal Year):** $0.00

**Short-Term Debt (Most Recent Fiscal Year):** $315,254.00

**Short-Term Debt (Prior Fiscal Year):** $0.00

**Long-Term Debt (Most Recent Fiscal Year):** $3,664,949.00

**Long-Term Debt (Prior Fiscal Year):** $0.00

**Revenues/Sales (Most Recent Fiscal Year):** $96,714.00

**Revenues/Sales (Prior Fiscal Year):** $0.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $0.00

**Cost of Goods Sold (Prior Fiscal Year):** $0.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $-65,427.00

**Net Income (Prior Fiscal Year):** $0.00

**Jurisdictions Offered:**

ALABAMA, ALASKA, ARIZONA, ARKANSAS, CALIFORNIA, COLORADO, CONNECTICUT, DELAWARE, DISTRICT OF COLUMBIA, FLORIDA, GEORGIA, HAWAII, IDAHO, ILLINOIS, INDIANA, IOWA, KANSAS, KENTUCKY, LOUISIANA, MAINE, MARYLAND, MASSACHUSETTS, MICHIGAN, MINNESOTA, MISSISSIPPI, MISSOURI, MONTANA, NEBRASKA, NEVADA, NEW HAMPSHIRE, NEW JERSEY, NEW MEXICO, NEW YORK, NORTH CAROLINA, NORTH DAKOTA, OHIO, OKLAHOMA, OREGON, PENNSYLVANIA, RHODE ISLAND, SOUTH CAROLINA, SOUTH DAKOTA, TENNESSEE, TEXAS, UTAH, VERMONT, VIRGINIA, WASHINGTON, WEST VIRGINIA, WISCONSIN, WYOMING, B5, GU, PR, VI, 1V

### Signatures

**Issuer:** Blocpower Energy Services 3 LLC

**Signature:** Cullen Kasunic

**Title:** Project Finance Officer

---

**Signature:** Donnel Baird

**Title:** CEO

**Date:** 02-28-2023

---

**Signature:** Cullen Kasunic

**Title:** Project Finance Officer

**Date:** 02-28-2023