ONE- YEAR PRICE AND VOLUME HISTORY. Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 volume close

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1 NEW YORK SÃO PAULO SHANGHAI () Electronic Technology - INVESTMENT HIGHLIGHTS Arkados Group, Inc. recently acquired SolBright Renewable Energy and expanded its service offerings to include solar power generation solutions among others. SolBright Renewable Energy s customer base and project pipeline provide unique cross- selling opportunities for its IoT solutions. As a result of this acquisition, Solbright renamed to Solbright Group Inc. and will be referred to as such for the remainder of this report. Solbright operates under the ticker. Solbright s core focus is on developing its extensive Industrial IoT software platform. The IoT industry is rapidly growing; according to Goldman Sachs, 12 billion devices are connected to the IoT, and this number could increase to 30 billion by Although lucrative, the IoT market is highly disruptive, with ever-increasing competitive products and services, which could pare demand for such products. Solbright will face the challenge of distinguishing itself from competitors. COMPANY DESCRIPTION engages in the provision of scalable and interoperable industrial internet of things solutions, through its subsidiaries. Its products and services include software and energy conservation. The company was founded in 1998 and is headquartered in Fairfield, NJ. COMPANY DATA KEY FINANCIALS (in $ millions, except EPS) 52-Week Range ($) FY13A FY14A FY15A FY16A Shares Outstanding (mn) Revenue Market Cap ($mn) EPS (0.90) (0.74) (0.26) (0.23) 3-Mo. Average Volume (mn) 0.02 Net Income (1.92) (4.41) (3.11) (3.35) Total Cash ($mn) 0.47 EBIT (2.44) (4.13) (3.08) (2.91) Total Debt ($mn) 9.92 EBITDA (2.44) (4.13) (3.08) (2.86) Dividend Yield (%) - Short Interest (%) N/A Insider Ownership (%) SHARE PRICE PERFORMANCE 2 ONE- YEAR PRICE AND VOLUME HISTORY 200, , , , Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17 Oct-17 volume close 845 Third Avenue Fl 6, New York, NY research@jgrcap.com

2 BULL CONSIDERATIONS Tremendous growth potential in the fast-growing Internet of things (IoT) market The IoT is a network of physical objects connected to the Internet that process information and communicates the output to the external world. IoT uses smart grid and smart applications in energy management. Solbright () operates in the fast-growing Industrial IoT industry, which is estimated to expand more than twofold in the coming years. According to Goldman Sachs, 12 billion devices are connected to the IoT, and this number could increase to 30 billion by is focusing on leveraging its expertise in energy conservation to develop smart technology offerings to generate robust revenue growth. The company s energy division helps customers control physical retrofitting of buildings to upgrade energy assets, implementing the most energy- and cost-efficient solutions in lighting, heating, power, and other industrial machinery. The software division helps improve efficiencies through innovative management, control, and monitoring of these assets. Further, the company s software technology enables smart monitoring of devices, energy management, and intelligent control through cloud services (IoT), ideal for smart manufacturing, smart building, and smart machine operations. Strong industry partnerships offer a key competitive advantage in developing IoT solutions has maintained a long-standing and robust partnership with Tatung Corporation. Tatung is a multibillion-dollar Taiwanese corporation and one of the world leaders in innovation and technology in the field of industrial, smart grid, and consumer electronics. The company, in partnership with Tatung, sells its software and services (including process and event management systems for smart factory (PEMS-SF), in-home bridge programmable logic controller (PLC) software, meter collar PLC software, and Arktic software platforms) through the OEM/ODM channel. benefits from Tatung s strong positioning and brand value, driving persistent growth in smart grid and electronics while ensuring continued licensing and services revenue. Other key collaborations include an agreement with AirFi networks, allowing the integration of advanced cellular connectivity solutions via SIMs, connected network, and machine-to-machine (M2M) communication platform into customer devices and systems that require remote communication, monitoring, and data gathering. The SolBright acquisition brings significant revenue and expansion synergies acquired SolBright Renewable Energy, a South Carolina-based leading designer and developer of solar energy systems, for $15 million during SolBright Renewable has handled projects worth 30 MV in the last few years. This acquisition bodes well for growth story, allowing it to grow its energy business into the rapidly growing renewables energy market. The company will expand its business in solar power generation and monitor and improve its comprehensive power generating systems. These new services offerings complement s core services well; SolBright s customer base and project pipeline provide unique cross-selling opportunities for its IoT solutions. SolBright s order backlog of $40 million, along with a growing pipeline, will add significantly to s revenue. research@jgrcap.com 2

3 BEAR CONSIDERATIONS High funding requirements and irregular margins threaten financial stability remains heavily dependent on funds raised through public and private sales of its securities, debt financing, and short-term bank loans to develop and expand its business. Currently, the company does not have any permanent potential source of financing and may not be able to raise the capital necessary to meet its working capital requirements in the near future. recently agreed to transfer 150,000 shares of its common stock in exchange for the waiver of two events of defaults with AIP Asset Management Inc. These events of default were related to the filing and issue of necessary documents and certificates. Such legal mishaps could result in reducing the credibility and worsening the investor s confidence in the management of the company. s continued net losses remain an area of concern. The company has started earning revenue; however, this is not sufficient to cover its operating expenses. Moreover, margins from the software and solar businesses vary, depending on the production volume and customer base, increasing uncertainty over future earnings. Customer concentration and limited number of suppliers can hamper growth Sales of s operating subsidiaries, SES and Solbright Inc., are highly concentrated in a few customers. If this customer base shrinks, the company will suffer huge losses, as it cannot support its fixed cost base and will have to consume working capital, leading to massive cash flow problems. The company is not only vulnerable concerning its customer base but also has access to a limited number of suppliers of solar energy system components and technologies, which exposes it to operational risks. Further, it sources components for its products from single-source suppliers, some of which have often been in short supply. Given these reasons, the company may face sales and installation delays and cancellations, affecting its revenue stream and market reputation. The disruptive nature of the industry and unproven products subject the company to additional difficulties in capturing market share Most of s products are new and unproven, such as its Arktic software platform, which enables customers to integrate the measurement and verification of data use as well as predictive analytics for baseline machine performance in their hardware products and systems. Moreover, needs to educate potential customers about the functioning and benefits of its products to increase its market presence. The market is highly disruptive, with ever-increasing competitive products and services, which could pare demand for such products. If its customers fail to recognize the need for such products and platforms, they may shift their preference toward alternative products and services. Moreover, if the company fails to provide competitive, technologically-advanced, and innovative products, its business, results of operations, and financial condition could be adversely affected. research@jgrcap.com 3

4 FINANCIAL AND VALUATION OVERVIEW P/E EPS Growth (vs. Previous Quarter) Sales Growth (vs. Previous Quarter) P/E(2016) NM 3Q % 3Q2017 NM P/E (ttm) NM 2Q % 2Q2017 NM PEG Ratio NM 1Q % 1Q2017 NM Price Ratios (ttm) ROE ROA Price/Book NM 3Q % 3Q % Price/Cash Flow NM 2Q % 2Q % Price/Sales Q2017 NM 1Q % Current Ratio Quick Ratio Operating Margin 3Q Q Q % 2Q Q Q % 1Q Q Q % Net Margin Pre-Tax Margin Book Value 3Q % 3Q % 3Q Q % 2Q % 2Q Q % 1Q % 1Q Inventory Turnover Debt-to-Equity Debt-to-Capital 3Q Q % 3Q % 2Q Q % 2Q % 1Q Q2017 NM 1Q2017 NM 5

5 Income Statement 4Q2016 1Q2017 2Q2017 3Q ($ in millions) Total Revenue % growth (0.32) (1.00) Total Cost of Revenue % of sales Gross Profit Margin % R&D % of sales SG&A NM % of sales , EBIT (0.50) (0.11) (2.02) (0.80) (2.44) (4.13) (3.08) (2.91) Margin % (1.29) (0.41) (1.59) (0.15) 0 (8.52) (1.65) (1.24) Interest Expense EBT (0.52) (0.13) (2.27) (3.21) (2.85) (4.61) (3.11) (3.20) Tax Expense NM Tax Rate % EBITDA (0.50) (0.11) (1.97) (0.66) (2.44) (4.13) (3.08) (2.86) Margin % (1.29) (0.41) (1.55) (0.12) 0 (8.52) (1.65) (1.22) Net Income Applicable to Common Shareholders (0.51) (0.27) (2.28) (3.81) (1.92) (4.41) (3.11) (3.35) Margin % (1.31) (1.03) (1.80) (0.72) 0 (9.10) (1.66) (1.43) Basic Shares Dil Shares EPS - Basic (0.04) (0.02) (0.15) (0.18) (0.83) (0.74) (0.26) (0.23) EPS - Dil (0.04) (0.02) (0.15) (0.18) (0.83) (0.74) (0.26) (0.23) Balance Sheet 4Q2016 1Q2017 2Q2017 3Q ($ in millions) Current Assets Total Assets Current Liabilities Total Liabilities Shareholders' Equity (1.96) (1.78) (4.12) (3.25) (1.55) 6.01 Total Liabilities and Shareholders' Equity research@jgrcap.com 6

6 Cash Flow Statement 4Q2016 1Q2017 2Q2017 3Q ($ in millions) Cash from operating activities 0.05 (0.35) (0.73) 0.73 (1.03) (0.58) (0.67) (1.23) Cash from investing activities (0.01) 0.00 (3.00) (0.00) (0.03) (3.01) Cash from financing activities (0.37) Net Change in Cash 0.21 (0.20) (0.23) 0.12 (0.18) 0.41 Cash at beginning of the year Cash at the end of the year Valuation Data Sales EPS ($ in millions) Ticker E E Acorn Energy, Inc. ACFN 8.7 N/A 0.0 N/A ORBCOMM Inc. ORBC (0.3) (0.1) Numerex Corp. Class A NMRX (1.3) (0.3) Inseego Corp. INSG (1.1) 0.0 QuickLogic Corporation QUIK (0.3) (0.1) 2.3 NM (0.2) NM Insider / Stakeholders %OS Position (000) SolBright Renewable Energy LLC PAN TAI JEE Richmake International Ltd. /WS/ Burton Lasalle Capital Corp DEFRANCO TERRENCE M Total research@jgrcap.com 7

7 COMPANY INFORMATION DISCLOSURE This report contains forward-looking statements, which involve risks and uncertainties. Actual results may differ significantly from such forward-looking statements. Factors that might cause such a difference include, but are not limited to, those discussed in the Risk Factors section in the SEC filings available in electronic format through SEC Edgar filings at The research analysts principally responsible for this research preparation do not receive compensation that is based upon any specific investment banking services or recommendations and can be compensated based on factors relating to the overall profitability of the JGR Capital ( firm ). As of the date of research distribution, neither the firm nor the principal research analysts beneficially own 1% or more of any class of common equity securities for this issuer (including, without limitation, any option, right, warrant, future, long or short position). The securities of the issuer(s) discussed in this research may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This research does not constitute a personal trading recommendation or take into account the particular investment objectives, financial situation or needs of an individual reader of this report, and does not provide all of the pertinent information to make an investment decision. JGR Capital does not provide investment banking services nor has it received compensation for investment banking services from the issuers covered in this research content. The firm does not make a market in the issuer s securities. It has received compensation from the issuer for providing non-investment banking services to this issuer. The noninvestment banking services provided to the issuer includes investor relations advisory and services, production of this research content, comprehensive reporting analytics, and financial analysis. The fees for these services vary on a per-client basis and are subject to the amount and category of provided services. For the services provided to the issuer covered in this report, engagement commenced on June 6th, 2017, for a 12-month period within the typical $5,000 to $13,000 compensation structure for the services engaged by this issuer. Firm analysts and members of the research production team are prohibited from holding or trading securities in the issuer. Additional information is available upon request. JGR Capital s research contents are based on data obtained from sources that it believes to be reliable and does not purport to be a complete statement of all material factors. This report is for informational purposes and is not a solicitation of orders to purchase or sell securities. No part of this material may be copied, photocopied or duplicated in any form or by any means, or redistributed without prior written consent from JGR Capital. All rights reserved. research@jgrcap.com 8