F-17

SOLARATTIC, INC.
STATEMENTS OF CASH FLOWS (Continued)
(UNAUDITED)

NOTES TO UNAUDITED FINANCIAL STATEMENTS

.

Note 1Unaudited statements

The interim financial statements are unaudited but have been prepared on a basis substantially
consistent with the audited financial statements appearing in this Prospectus. In the opinion of
management, all necessary adjustments (consisting of normal recurring adjustments) have been
included to present fairly the unaudited six month period results when read in conjunction with the
audited financial statements. The results of operations for any interim period are not necessarily
indicative of results for the full year. These unaudited financial statements should be read in
conjunction with the Company’s audited financial statements presented herein.

Note 2Stock options and warrants

Stock option information contained in the audited financials remains unchanged from December
31, 1998. There are no stock warrants outstanding.

Note 3Stock option plan

Stock option plan information contained in the audited financials remains unchanged from
December 31, 1998. See “Employee Stock Option Plan” and “Notes to Audited Financials.”

Note 4Research and development

Research and development costs are charged to operations as incurred and totaled $1,049 and
$4,031 for the six-month periods ending June 30, 1998 and 1999, respectively.

Note 5Officer Note

On June 7, 1999 James F. Stanley, a vice president, loaned the Company $8,000 in cash for
the purpose of purchasing inventory. The loan is a short-term note bearing a simple interest rate of
5.00% per annum and is carried on the Company’s balance sheet statement as an addition to
“Current maturities of notes payable to officers.”

Six Month Periods Ending June 30

1998

1999

Supplemental Disclosures of Cash Flow
Information
Cash payments for interest
Income taxes paid

$7,842
$-

$9,219
$-

Supplemental Schedule of Noncash Investing
and Financing Activities
Issuance of common stock for prepaid rent

$-

$

24,820

See Notes to Unaudited Financial Statements.

F-18

This page intentionally left blank.

X-1

Investor Subscription Agreement
SolarAttic, Inc.

Persons interested in purchasing shares of the Common Stock of SolarAttic, Inc. (the “Shares”)
must complete and return this Subscription Agreement along with their check or money order to:

SolarAttic, Inc., 15548 95th Circle NE, Elk River, Minnesota 55330

When accepted by SolarAttic, Inc., a Minnesota corporation (the “Company”), this Subscription
Agreement shall constitute an irrevocable subscription for shares of Common Stock, no par value,
of the Company. The minimum investment is $500 (500 shares). A copy of the accepted
Agreement will be returned as a receipt and a stock certificate will be issued shortly thereafter.

The undersigned (referred to herein as the “Subscriber”) desires to become a SHAREHOLDER
and hereby irrevocably (after 72 hours) tenders this subscription agreement and subscribes for that
number of shares (the “Shares”) of the Company’s common stock as stated below, at the price of
one-dollar ($1.00) per share, upon the terms, conditions and representations set forth herein.
Investors can revoke their purchase of the shares for 72 hours by filling out the form on page X-3.

1. The Subscriber acknowledges and represents as follows:

(a) That the Subscriber has received and carefully reviewed the Company’s prospectus, dated
August 16, 1999, (the “Prospectus”) and that the Subscriber does not rely upon the verbal
representation made by any officer, employee or agent of the Company. Notwithstanding the
availability of other relevant information on the Internet or elsewhere, Subscriber represents
that this subscription is based upon the information contained within said Prospectus; and

(b) That the Subscriber has the net worth and/or income to be able to bear the economic risk of
an investment in the Shares; and

(c) That the Subscriber has such knowledge and experience in financial and business matters
so as to be capable of evaluating the merits and risks of an investment in the Shares; and

(d) That the Subscriber has determined that the Shares are a suitable investment for him, her or
it and meets his, her or its investment objectives and financial needs, and that the Subscriber
has adequate means for providing for current financial needs and personal contingencies and
has no need for liquidity if a market for the Shares does not develop; and

(e) That the Subscriber recognizes that an investment in the Shares is highly speculative and
involves a high degree of risk, including those in the Prospectus discussed under the heading
“Risk Factors;” and

(f) That the Subscriber is purchasing the shares herein for investment purposes only.

2. The Subscriber represents and warrants that he, she or it is a bona fide resident of, and is
domiciled in the State, or jurisdiction, stated below and that the Shares are being purchased solely
for the beneficial interest of the Subscriber.

3. The Subscriber understands that the Company will escrow the proceeds from the first 150,000
shares sold and that stock certificates will be issued only after the minimum escrow proceeds have
been raised. The Subscriber understands that the Company will also use and rely upon all of the
representations, warrants, registration and subscriber information provided herein.

Make check or money order out, in the appropriate amount, payable directly to
“SolarAttic, Inc.” Mail the signed subscription agreement and funds to SolarAttic,
Inc., 15548 95th Circle NE, Elk River, Minnesota 55330-7228. Call Ed Palmer,
SolarAttic’s CEO, at (763) 441-3440 if you have any questions about this form.

X-2

4. REGISTRATION INFORMATION:

(Please print)

Name of Subscriber

Street Address

(Mail notices and reports to)

City/State/Zip Code

Telephone Number(s)

Social Security Number

Tax Identification Number

(If applicable)

Shares Purchased

(500 Share Minimum)

Amount of Funds Enclosed

$

($500 Minimum)

State of Residence/Domicile

Register Shares As*

*
*(If different from the above “Name of Subscriber”, Register Shares as shown here.)

5. THE SUBSCRIBER(s) IS (are):
( )Corporation

()

Trust:

(
(
(
(

)
)
)
)

A single person
Husband and wife, community property
Joint Tenants
A married (man) (woman) as (his) (her)
separate property
Tenants in Common
Other____________________________

Trustees(s)________________________
Trust Date ________________________
Name of Trust _____________________
For the Benefit of___________________

(
(

)
)

()

Custodian for______________________
under the Uniform Gift to Minors Act of
the State of :

oMy Check Is Enclosed

Charge My: o Visao MasterCardo America Express

Card# ________________________________________Expiration date _______________

Name on card________________________________________________________________

Check all that apply:o Accredited Investor as defined by Rule 501 of SEC Regulation D.
o A bank, savings & loan, insurance co., investment co., or a SBIC.
o Investment represents more than 10% of net worth excluding house.

Signature(s):

__________________________________________

Date: _______________

__________________________________________
Signature of Subscriber(s)

__________________________________________

__________________________________________
Print Name(s)

Acceptance by Company:

Subscription accepted this _______ day of _________________, _______, by SolarAttic, Inc.

__________________________________________
Edward G. Palmer, CEO