EFTA02625152

From: Paul Barrett Sent: Tuesday, September 4, 2018 1:18 AM To: Jeffrey E. Cc: Richard Kahn Subject: RE: Wheel Tug Jeffrey Let me know how you would like to proceed. Paul Paul Barrett Alpha Group Capital LLC 142 W 57th Street, 11th Floor,=New York, NY 10019 <=p> From: Paul Barrett Sent: Tuesday, August 28, 2018 11:33 AM To: Jeffrey E. <[email protected]> Cc: Richard Kahn Subject: Wheel Tug Hi Jeffrey 1 EFTA_R1_01836593 EFTA02625152 I did a preliminary call with the CEO (Isaiah Cox).<=.:p> • Company looking to raise $12MM which should get them through final FA= certification and enable the first commercial aircraft installation in 20=9. • The company will provide the equipment free of cha=ge (including installation) to the airlines. Cost to the company of $200K.=In return they take half of the savings generated by having the device installed. • Installation takes 8-12 hours =er plane. Teams will travel around the world for installations.=/li> • See big demand from Middle East airlines (not needing to keep th= engines running and therefore less damage from dust). Currently order boo= over 1000. • Savings determined by: • Push back fee — agreed and known • Pre-agree=fuel savings • Time saved on ground by turning around t=e plane more quickly and getting back into the air— measured as $/mi=ute saved =/p> • Wheel Tug would keep half these savings • Deloitte=study (attached) gave a wide range of $440 - $3300 savings per flight per =lane • They offered a deal where you get 10% of revenue=until you get a multiple of your investment. How about asking for 10% of r=venue until we get 5x our investment back plus warrants at today's valuation (currently at $1.361n). Also would ask for liqu=dation priority over all existing equity holders. • They assume 1720 flights per year per plane and targe=ing an installed base of 1700 planes by 2022. • Based on a Deloitte study of potential savings combin=d with the company's installation projections, below is a table show=ng the 10% of Wheel Tug's revenue that would be payable to you. For example in a Low Savings environment you would get - $11MM b=ck by 2020 and then an additional $31.SMM by 2021. Total 5x payout of $60M= would be complete in 2022. Investorg=pan> 2019 2020 2021 2022 Low Savings $ 2,389,338.=0 $ = 8,685,054.00=/p> $ = 31,516,506.00 $ = 66,635,982.00 Medium Savings</=:p> 2 EFTA_R1_01836594 EFTA02625153 $ 5,959,800..0 $ = 21,663,400.00 $ = 78,612,600.00 $ = 166,212,200.00 High Savings $ 17,879,400.00 $ = 64,990,200.00 $ = 235,837,800.00 $ = 498,636,600.00 Chart below is a breakdown of how they could save an airline $2550 pe= flight (optimistic in my opinion as most U.S airports don't have du=1 loading capacity). Any chance we can get your pilot on a call with the =EO to verify these assumptions? Summary: The WheelTug incorporates the element= of an electric motor, such as the stator and the rotor, inside the hub of=each of the 737's twin nose wheels. Instead of a battery, these moto=s draw current directly from the auxiliary power-unit, a small generator in the rear of an airliner that is used on the ground to=run its electrical services. For a long taxi, they can also take power fro= the generators driven by the aircraft's jet engines Paul Barrett Alpha Group Capital LLC 142 W 57th Street, 11th Floor, New York, NY 10019 3 EFTA_R1_01836595 EFTA02625154 4 EFTA_R1_0 1836596 EFTA02625155