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BURNinNews May 2020

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BURN Investor Letter - May 2020

Trade Secret & Confidential.

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Dear <>,

We hope you are well and keeping safe and healthy during this unprecedented global crisis.

COVID-19 & BURN’s Resilience:

Even before the first COVID-19 case was diagnosed in Kenya, BURN implemented stringent sanitation and social distancing measures at our factory, while also enforcing a work-from-home mandate for non-production employees. This has allowed us to maintain production to meet consistent demand across all our markets.

COVID-19 Feeding Program:

During these difficult times, where many Kenyans are struggling to earn daily wages, BURN has stepped up to help feed vulnerable people by providing stoves and fuel at zero-cost. We have provided our new institutional TurboPro stoves and agricultural waste briquettes to 10 organizations in Nairobi that feed at-

risk children. We are looking to place an additional 190 stoves in the coming months.

Three consecutive years of profitability:

2019 was a record year for BURN. We sold over 220,000 stoves, which generated revenue of approximately $5.8M, EBITDA of $939,000, and net income of $748,000. 2019 represented BURN’s third consecutive year of profitability, while revenue has grown at an average of 57% per year since 2014. We also ended 2019 with a strong balance sheet and positive book equity of approximately $967,000.

We have updated these figures in a new financial model and investment memorandum that are now available. Please reach out directly to peter.scott@burnmfg.com or nina.stirum@burnmfg.com for further information.

Fundraising Update & Traction:

In the first quarter of 2020, we successfully closed a $500,000 bridge loan with AHL Venture Partners, a longtime partner, and shareholder of BURN Manufacturing. BURN is targeting a $12M capital raise in 2020 comprised of both equity ($7M), and debt ($5M).

Further information is available in the investment memorandum and financial model.

Grant Awards: $1.4M awarded in 2020

BURN’s Special Projects and Research team continue to succeed in obtaining new grants for new product development and pilot programs. Below are highlights from this quarter of the newly awarded grants that BURN has received:

  • Department for International Trade - Energy Catalyst - $726,000

  • SDG Results - $1.17M

  • Transforming Energy Access - $238,000

  • Modern Energy Cooking Services - Electric Cooking Outreach ECO - $74,000

  • GIZ - $50,000

    Ecoa:

    BURN’s first container of the V1 Electric Pressure Cookers – the “EcoaTM” – have been produced and will soon be allotted to our pilots in Kenya and Uganda. At the same time, grant funding is enabling us to design the next generation of electric pressure cookers specifically for the African market, which includes smart metering, battery storage, adaptive voltage, and pay-as-you-cook financing.

    We look forward to engaging with you in the months to come, and we hope that you, your teams, and your loved ones remain safe & healthy in these times.

    Sincerely,

    Peter Scott, Founder & CEO

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Pursuant to the confidentiality agreement and non-disclosure agreement entered into between the recipient(s) of this message and BURN Manufacturing Co., the content within this message is trade secret and confidential. The circulation and copying of the information contained herein or provided herewith and which may not be reproduced or used in whole or in part for any purpose, nor may it be disclosed or otherwise made available to any third party, without the express written consent of BURN.

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Visit us at www.burnstoves.com
Drop us a line at communications@burnmfg.com

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Copyright © 2019 BURN Manufacturing Co. All rights reserved.

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