As filed with the
Securities and Exchange Commission on August 15, 2025
(Amendment No. 2)
Part II -
Information Required in Offering Circular
Preliminary
Offering Circular dated August 15, 2025
AN OFFERING STATEMENT PURSUANT
TO REGULATION A RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE U.S. SECURITIES
AND EXCHANGE COMMISSION ("SEC"). INFORMATION CONTAINED IN THIS
PRELIMINARY OFFERING CIRCULAR IS SUBJECT TO COMPLETION OR AMENDMENT. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED BEFORE THE
OFFERING STATEMENT FILED WITH THE COMMISSION IS QUALIFIED. THIS PRELIMINARY
OFFERING CIRCULAR SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY NOR MAY THERE BE ANY SALES OF THESE SECURITIES IN ANY STATE IN
WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL BEFORE REGISTRATION OR
QUALIFICATION UNDER THE LAWS OF ANY SUCH STATE. WE MAY ELECT TO SATISFY OUR
OBLIGATION TO DELIVER A FINAL OFFERING CIRCULAR BY SENDING YOU A NOTICE WITHIN
TWO BUSINESS DAYS AFTER THE COMPLETION OF OUR SALE TO YOU THAT CONTAINS THE URL
WHERE THE FINAL OFFERING CIRCULAR OR THE OFFERING STATEMENT IN WHICH SUCH FINAL
OFFERING CIRCULAR WAS FILED MAY BE OBTAINED.
Energea Portfolio 5
LATAM LP
Up to $50,000,000
in Class A Investor Shares
Offering Circular (Subject to
Completion) Dated:
August 15, 2025
This Offering
Circular Follows the Form 1-A Disclosure Format
Energea Portfolio 5 LATAM LP (the
"Company", "us", "we", "our" and similar terms) is a limited partnership
organized under the laws of Delaware to invest in the acquisition, development,
and operation of solar energy projects in countries in the Central America, South
America and/or the Caribbean located below the southern border of the United
States (such countries are herein after referred to as "Latin America"
or "LATAM" and each such solar energy project is hereinafter referred to
as a "Project"). The Company may also lend money to Development
Companies and use solar projects as collateral rather than acquiring Projects
for direct ownership (each a "Loan"). The Company's day-to-day
operations are managed by Energea Global LLC (the "General Partner" and
together with its affiliates "Energea Global").
The
Company is currently offering up to $50.0 million in limited partnership
interests designated as "Class A Investor Shares" (the "Offering")
pursuant to Regulation A ("Regulation A") of the Securities Act of 1933,
as amended (the "Securities Act"). The current price of the Class A
Investor Shares is $1.00 per Class A Investor Share, and the minimum initial
investment is $100.
Page i
There is currently no
established secondary market for the Class A Investor Shares, and Investors may
not be able to sell their Class A Investor Shares. While Investors should view
an investment in the Company as long-term, the Company offers a Redemption Plan
in order to provide Investors with an opportunity to obtain liquidity. See
"Securities Being Offered: The Class A Investor Shares-Summary of LP Agreement
and Authorizing Resolution-Redemption Plan" and "Risk Factors-No Market for the
Class A Investor Shares; Limits on Transferability".
Investors
may not be able to sell their Class A Investor Shares except by submitting a
Redemption Request to the Company through our General
Partner's website, www.energea.com (the "Platform"). Pursuant to the Redemption Plan, Investors must hold
their Class A Investor Shares for at least 60 days before they can request
redemption of their Class A Investor Shares via the Platform; if the General
Partner agrees to honor a Redemption Request, the Company has 90 days to make
payment on such redemption; and the General Partner may, in its sole
discretion, amend, suspend, or terminate the Redemption Plan at any time
without prior notice. Additionally, Class A Investor Shares may not be
transferred without the Company's consent, which can be withheld in its sole
discretion, and the General Partner has a right of first refusal to purchase
any Class A Investor Shares proposed to be transferred. See
"Redemption Plan" and "Risk Factors-No Market for the Class A Investor Shares".
Investors should note that
the General Partner may decide to sell the Projects or the Company at any time.
Should the General Partner decide to sell the Company, Investors could be
forced to sell their Class A Investor Shares at the direction of the General
Partner. See "Drag-Along Right".
The purchase of these
securities involves a high degree of risk. Before investing, you should read
this entire Offering Circular and exhibits hereto, including "Risk Factors".
The Company is selling Class A
Investor Shares directly to the public through the Platform. Neither the
Company nor any affiliated entity involved in this Offering is a member firm of
the Financial Industry Regulatory Authority, Inc. ("FINRA"), and no
person associated with this Offering will be deemed to be a broker solely by
reason of his or her participation in the sale of our Class A Investor Shares.
Investors will not pay upfront selling commissions or broker fees in connection
with the purchase of Class A Investor Shares. We will reimburse our General
Partner for certain expenses incurred on our behalf, and pay our General
Partner certain fees, as described further under "Compensation of General
Partner".
This is a
"best efforts - no minimum" offering. The Offering will commence as soon as
our offering statement is "qualified" by the SEC and will end on the
date we raise the maximum amount being offered, unless earlier terminated by
the Company. We will reimburse the General Partner for marketing expenses in an
amount up to 5% of the total Offering amount raised. See "Use of Proceeds".
|
|
Per Share
|
Total Maximum
|
|
Public
Offering Price
|
$1.00
|
$50,000,000
|
|
Marketing Expenses
|
$0.05
|
$2,500,000
|
|
Proceeds
to the Company from this Offering to the Public
|
$0.95
|
$47,500,000
|
THE SEC DOES NOT PASS UPON THE
MERITS OF OR GIVE ITS APPROVAL TO ANY SECURITIES OFFERED OR THE TERMS OF THE
OFFERING, NOR DOES IT PASS JUDGEMENT UPON THE ACCURACY OR COMPLETENESS OF ANY
OFFERING CIRCULAR OR OTHER SOLICITING MATERIALS. THESE SECURITIES ARE OFFERED
PURSUANT TO AN EXEMPTION FROM REGISTRATION WITH THE COMMISSION; HOWEVER, THE
COMMISSION HAS NOT MADE AN INDEPENDENT DETERMINATION THAT THE SECURITIES
OFFERED ARE EXEMPT FROM REGISTRATION.
GENERALLY, NO SALE MAY BE MADE
TO A NON-ACCREDITED INVESTOR FROM THIS OFFERING IF THE AGGREGATE PURCHASE PRICE
THE NON-ACCREDITED INVESTOR PAYS IS MORE THAN 10% OF THE GREATER OF THEIR
ANNUAL INCOME OR NET WORTH. DIFFERENT RULES APPLY TO ACCREDITED INVESTORS AND
NON-NATURAL PERSONS. BEFORE MAKING ANY REPRESENTATION THAT YOUR INVESTMENT DOES
NOT EXCEED APPLICABLE THRESHOLDS, WE ENCOURAGE YOU TO REVIEW RULE
251(D)(2)(I)(C) OF REGULATION A. FOR GENERAL INFORMATION ON INVESTING, WE
ENCOURAGE YOU TO REFER TO WWW.INVESTOR.GOV FOR MORE INFORMATION, SEE "LIMIT
ON AMOUNT A NON-ACCREDITED INVESTOR CAN INVEST".
NEITHER THE SEC NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
Page ii
TABLE OF CONTENTS
|
Section
|
Page
|
|
1
|
|
|
2
|
|
|
2
|
|
|
2
|
|
|
3
|
|
|
3
|
|
|
3
|
|
|
10
|
|
|
10
|
|
|
11
|
|
|
11
|
|
|
13
|
|
|
13
|
|
|
13
|
|
|
14
|
|
|
14
|
|
|
14
|
|
|
15
|
|
|
16
|
|
|
16
|
|
|
17
|
|
|
17
|
|
|
18
|
|
|
19
|
|
|
19
|
|
|
19
|
|
|
20
|
|
|
20
|
|
|
20
|
|
|
20
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
21
|
|
|
22
|
|
|
22
|
|
|
23
|
|
|
23
|
|
|
24
|
|
|
24
|
|
|
24
|
|
|
24
|
|
|
24
|
|
|
24
|
|
|
25
|
|
|
25
|
|
|
25
|
|
|
25
|
|
|
26
|
|
|
26
|
|
|
26
|
|
|
26
|
|
|
27
|
|
|
27
|
|
|
27
|
|
|
27
|
|
|
28
|
|
|
28
|
|
|
28
|
|
|
28
|
|
|
28
|
|
|
31
|
|
|
32
|
|
|
32
|
|
|
33
|
|
|
33
|
|
|
33
|
|
|
33
|
|
|
34
|
|
|
35
|
|
|
35
|
|
|
35
|
|
|
35
|
|
|
35
|
|
|
36
|
|
|
36
|
|
|
36
|
|
|
36
|
|
|
37
|
|
|
37
|
|
|
37
|
|
|
37
|
|
|
37
|
|
|
38
|
|
|
38
|
|
|
38
|
|
|
38
|
|
|
38
|
|
|
38
|
|
|
39
|
|
|
39
|
|
|
39
|
|
|
39
|
|
|
40
|
|
|
40
|
|
|
40
|
|
|
41
|
|
|
42
|
|
|
42
|
|
|
43
|
|
|
43
|
|
|
44
|
|
|
45
|
|
|
45
|
|
|
46
|
|
|
46
|
|
|
46
|
|
|
56
|
|
|
58
|
|
|
58
|
|
|
59
|
Page iii
We
make statements in this Offering Circular that are forward-looking statements.
The words "outlook," "believe," "estimate,"
"potential," "projected," "expect,"
"anticipate," "intend," "plan," "seek,"
"may," "could" and similar expressions or statements
regarding future periods are intended to identify forward-looking statements.
These forward-looking statements involve known and unknown risks, uncertainties
and other important factors that could cause our actual results, performance or
achievements, or industry results, to differ materially from any predictions of
future results, performance or achievements that we express or imply in this Offering
Circular or in the information incorporated by reference into this Offering Circular.
The
forward-looking statements included in this Offering Circular are based upon
our current expectations, plans, estimates, assumptions and beliefs that
involve numerous risks and uncertainties. Assumptions relating to the foregoing
involve judgments with respect to, among other things, future economic,
competitive and market conditions and future business decisions, all of which
are difficult or impossible to predict accurately and many of which are beyond
our control. Although we believe that the expectations reflected in such
forward-looking statements are based on reasonable assumptions, our actual
results and performance could differ materially from those set forth in the
forward-looking statements. Factors which could have a material adverse effect on
our operations and future prospects include, but are not limited to:
· our
ability to effectively deploy the proceeds raised from this Offering;
· ability
to attract and retain Investors on the Platform;
· risks associated
with breaches of our data security;
·
public health crises, pandemics and epidemics, such
as those caused by new strains of viruses such as H5N1 (avian flu), severe
acute respiratory syndrome (SARS) and, most recently, the novel coronavirus
(COVID-19);
·
climate change and natural disasters that could
adversely affect our Projects and our business;
·
changes in economic conditions generally and the
renewable energy and securities markets specifically;
·
limited ability to dispose of assets because of the
relative illiquidity of renewable energy Projects and Loans;
·
our failure to obtain necessary outside financing;
·
risks associated with derivatives or hedging activity;
·
intense competition in LATAM renewable energy markets
that may limit our ability to attract or retain Customers (as defined below);
·
defaults under Supporting Contracts (see "Summary of
Supporting Contracts");
·
increased interest rates and/or operating costs;
·
the risk associated with potential breach or expiration
of a ground lease, if any;
·
our failure to successfully construct, interconnect,
operate or maintain the Projects;
·
inability of a Borrower to make payments on a Loan;
Page 1
·
the failure of Projects and Loans to yield anticipated
results;
·
exposure to liability relating to environmental and
health and safety matters;
·
our level of debt and the terms and limitations imposed
on us by our debt agreements;
·
our General Partner's ability to retain executive
officers and other key personnel;
·
the ability of our General Partner to source, originate
and service our Projects and Loans;
·
the ability for our engineering, procurement and
construction contractors and equipment manufacturers to honor their contracts
including warranties and guarantees;
·
regulatory changes impacting our business or our assets
(including changes to the laws governing the taxation of corporations and SEC
guidance related to Regulation A, or the Jumpstart Our Business Startups Act of
2012 (the "JOBS Act");
·
changes in business conditions and the market value of
our Projects, including changes in renewable energy policy, interest rates,
prepayment risk, operator or Borrower defaults or bankruptcy, and generally the
increased risk of loss if our investments fail to perform as expected;
·
our ability to implement effective conflicts of interest
policies and procedures among the various renewable energy investment
opportunities sponsored by our General Partner;
·
our compliance with applicable local, state and federal
laws, including the Investment Advisers Act of 1940, as amended (the "Advisers
Act"), the Investment Company Act of 1940, as amended, and other laws; and
·
changes to U.S. generally accepted accounting principles ("U.S.
GAAP").
Any of the assumptions underlying forward-looking
statements could be inaccurate. You are cautioned not to place undue reliance
on any forward-looking statements included in this Offering Circular. All
forward-looking statements are made as of the date of this Offering Circular
and the risk that actual results will differ materially from the expectations
expressed in this Offering Circular will increase with the passage of time. We
undertake no obligation to publicly update or revise any forward-looking statements
after the date of this Offering Circular, whether because of new information,
future events, changed circumstances or any other reason. Considering the
significant uncertainties inherent in the forward-looking statements included
in this Offering Circular, including, without limitation, those named above and
those named under "Risk Factors", the inclusion of such
forward-looking statements should not be regarded as a representation by us or
any other person that the objectives and plans set forth in this Offering
Circular will be achieved.
Executive Summary
Energea Portfolio 5 LATAM LP (the
"Company") is a limited partnership organized under the laws of
Delaware. The Company has elected to be taxed as a "C" corporation for United
States federal and state income tax purposes. The Company's day-to-day
operations are managed by Energea Global LLC (the "General Partner"). As
of the date of this Offering Circular, we do not have any Projects and we have
made one (1) Loan (which is further described below) and we have not generated
any revenue.
The Company was created to invest
in the acquisition, development, and operations of solar energy projects in LATAM
countries (each a "Project"). The Projects will sell power and, in some
cases, environmental commodities, to offtakers (who we collectively refer to as
"Customers") who purchase the power or the environmental commodities
under long term contracts. The Company may also lend money to Development
Companies (which we collectively refer to as "Borrowers") and use solar
projects as collateral rather than acquiring Projects for direct ownership
(each a "Loan").
Page 2
As the Company earns revenue, it will
use the revenue to pay for operating expenses (see "Our Operating Costs and
Expenses") and distribute the remaining cash to the holders of our Class A
Investor Shares (our "Investors"), our Reg D Investors (as such term is
defined herein and together with the Investors, the "Preferred Equity
Investors") and the holders of our Common Shares (which is currently the
General Partner). See "Company Operations and Other Matters".
The Company is offering up to
$50.0 million of Class A Investor Shares pursuant to Regulation A. The proceeds
of our Offering will be used to construct and/or acquire Projects and to issue
Loans.
We
are offering to sell, and seeking offers to buy, the shares only in
jurisdictions where such offers and sales are permitted. You should rely only
on the information contained in this Offering Circular. We have not authorized
anyone to provide you with any information other than the information contained
in this Offering Circular. The information contained in this Offering Circular
is accurate only as of its date, regardless of the time of its delivery or of
any sale or delivery of our securities. Neither the delivery of this Offering
Circular nor any sale or delivery of our securities shall, under any
circumstances, imply that there has been no change in our affairs since the
date of this offering circular. This offering circular will be updated and made
available for delivery to the extent required by the federal securities laws.
The Company expects to generate cash
flow in three ways: (i) payments from Projects, (ii) payments from Loans and
(iii) returns from investments (for example, interest gained from a money
market savings account from cash-on-hand) ("Company Investments"). Cash
flow will first be used to pay operating costs and expenses, including fees and
reimbursements payable to our General Partner (see "Our Operating Costs and
Expenses"). The remaining cash flow, if any, is
distributed to the Preferred Equity Investors and the General Partner in
the following order of priority:
·
First, a preferred return equal to a 7% IRR payable to Preferred
Equity Investors, as more fully described in the Authorizing Resolutions (the "Preferred
Return"); and
·
Thereafter, any additional cash flow will be split between the
Preferred Equity Investors and the General Partner such that 80% is distributed
to Preferred Equity Investors and 20% to the General Partner (the "Carried
Interest").
Be advised that only proceeds on
the interest, and not on the repayment of the principal, which the Company
receives from Loans and returns from Company Investments will be eligible for
distribution. Repayment of principal of either Loans or Company Investments
will not be eligible to be distributed to either the General Partner or the
Limited Partners (together, the "Partners") and will be available for
investment by the Company, in the General Partner's sole discretion.
See "Compensation of General
Partner" and "Calculating Distributions" for more detailed
information regarding fees and distributions payable to the General Partner.
Preferred Equity Investors have
no voting rights.
CAUTION: ALTHOUGH THE CASH FLOW
FROM OUR PROJECTS AND LOANS WILL LARGELY BE ESTABLISHED BY CONTRACT IN ADVANCE,
THERE IS NO GUARANTEE THAT OUR PROJECTS OR LOANS WILL GENERATE ANY POSITIVE
CASH FLOW.
BUYING CLASS A INVESTOR SHARES IS
SPECULATIVE AND INVOLVES SIGNIFICANT RISK, INCLUDING THE RISK THAT INVESTORS
COULD LOSE SOME OR ALL OF THEIR MONEY. THIS SECTION DESCRIBES SOME OF THE MOST
SIGNIFICANT FACTORS THAT THE COMPANY BELIEVES MAKE AN INVESTMENT IN THE CLASS A
INVESTOR SHARES RISKY. THE ORDER IN WHICH THESE FACTORS ARE DISCUSSED IS NOT
INTENDED TO SUGGEST THAT SOME FACTORS ARE MORE IMPORTANT THAN OTHERS. You should carefully consider the following
risk factors in conjunction with the other information contained in this
offering circular before purchasing the CLASS A INVESTOR SHARES.
Page 3
The Track Record of Our
Principals Does Not Guarantee Success: The principals of the Company and
the General Partner have been involved in the solar industry for approximately
18 years, developing more than 500 solar projects. See "PAST PERFORMANCE" on
page 26. However, past performance is never a guaranty of future results, and
the success of our principals in other solar projects does not guaranty that
the Company will be successful.
We Have Not Yet Acquired Any
Projects: As of the date of this Offering Circular, the Company has not
acquired any Projects and has made one Loan. Therefore the Company has
generated no revenue.
Risks Associated with
Renewable Energy Projects: The market for renewable energy is changing
rapidly. If renewable technology proves unsuitable for widespread commercial
deployment or if demand for renewable energy products, especially solar energy
products, fails to develop sufficiently, our Projects and Loans might not be
able to generate enough revenues to achieve and sustain profitability. The
factors influencing the widespread adoption of renewable energy technology
include, but are not limited to: cost-effectiveness of renewable energy
technologies as compared with conventional technologies; performance and
reliability of renewable energy products as compared with conventional energy
products; and the success of other enabling technologies such as battery
storage and Distributed Energy Resource Management Systems ("DERMS").
The Investment Environment May
Change Over Time: The Company's investment in the Projects and Loans
is intended to extend over a period of years, during which the business,
economic, political, regulatory, and technology environment within which the
Company operates may undergo substantial changes, some of which may be adverse
to the Company. The General Partner will have the exclusive right and authority
(within limitations set forth in the LP Agreement) to determine the manner in
which the Company shall respond to such changes, and Limited Partners generally
will have no right to withdraw from the Company or to demand
specific modifications to the Company's operations in consequence thereof. A
major recession or adverse developments in the securities or credit markets
might have an impact on the Company's investments in the Projects and Loans. In
addition, factors specific to the Projects and Loans may have an adverse effect
on the Company.
Net Losses: Since we have
not acquired any Projects and have made one (1) Loan, we do not have any
revenue and are currently incurring net losses may continue incurring net
losses in the future. If our operating expenses exceed our expectations, our
financial performance could be adversely affected. If we are able to generate
revenue, and our revenue does not grow to offset these increased expenses, we
may never become profitable. In future periods, we may not have any revenue
growth, or our revenue (if any) could decline.
Distributions to Investors:
Whether to distribute operating cash flow or capital proceeds and how much to
distribute, is at the sole discretion of the General Partner. No returns are
guaranteed, and Investors will receive distributions only if the Company
generates distributable cash flow from the Projects and Loans. Investors will
not have any recourse in the event we are unable to pay distributions. Because
we have not made any profit to date and have no current or accumulated earnings
and profits, such cash distributions to Investors will be considered a return
of capital for U.S. federal income tax purposes to the extent that the
distributions do not exceed the adjusted tax basis of the U.S. Holder's Class A
Investor Shares. See "Management Discussion and Analysis of Financial
Condition and Result of Operation-Distributions."
Distributions Generally:
Our ability to achieve our investment objectives and to pay distributions
depends upon the performance of our General Partner in the acquisition of our
Projects and Loans and the ability of our General Partner to source investment
opportunities for us. In the event we are unable to timely locate suitable
investments, we may be unable or limited in our ability to pay distributions
and we may not be able to meet our investment objectives. If we pay
distributions from sources other than our cash flow from Projects and Loans, we
will have less funds available for investments and your overall return will be
reduced.
Competition: The Company
intends to compete in the utility-scale, commercial and industrial ("C&I")
and rural electrification segments of the solar markets of LATAM countries. Several
multinational independent power producers ("IPPs") such as ENEL
Green Power, AES, and Celsia currently service a large portion of the
utility-scale segment and could even expand into smaller segments, including the
C&I segment.
Page 4
In addition to these
multinational players, the Company faces competition from smaller, local
developers that specialize in distributed generation and behind-the-meter solar
solutions. Companies such as Erco Energía, Suncol, and Green
Yellow are particularly active in the C&I segment.
The Company also intends to
compete for rural electrification projects. As international funding for rural
electrification projects increases (which we believe may occur due to new
government regulations designed to encourage private investment and
government-backed programs), new entrants in this space are likely to emerge.
Our Customers and/or Borrowers
Might Default: The Company will have a variety of Customers and Borrowers,
including businesses, retirement communities and schools. Some Customers could
default. A default would hurt the Project in question financially, reducing the
anticipated returns to Investors. Customers and Borrowers may face intense
competition, changing business and economic conditions, risks of technological
acceptance and obsolescence or other developments that may adversely affect
their ability to pay. Within the limitations set forth in the LP Agreement, the
General Partner will have the right and authority to cause the Company's
investment management and liquidation strategies and procedures to deviate from
those described in this Offering Circular.
We Might Own Only a Small
Number of Projects: If the Company is successful in raising the current
maximum offering amount of $50.0 million in this Offering, the Company would
likely acquire or invest in between 50 and 100 Projects. If the Company raises
significantly less than the maximum offering amount, it may not be able to
invest in as many Projects. If the Company owns only a small number of
Projects, Investors will be exposed to greater concentration risk.
Possible Changes in
Governmental Policies: The Projects depend on the energy policies of the LATAM
countries where we may invest. These policies could expire, phase-out over
time, require renewal by the applicable authority, or become a victim of
political pressure. Certain governments in LATAM countries have instituted
changes to their policies over the past several years. Some of those changes
have positively affected our business while others have had a negative impact.
The new policies could disfavor solar projects in general and our Projects in
particular.
Delays in
Connecting to Power Grid: The Projects must be physically connected to the
power grid, a process that involves sophisticated engineering and government
regulation. Delays are not uncommon. For example, the utility involved might be
required to perform physical upgrades to allow for the safe and consistent
generation, distribution, and/or transmission of electricity from a Project to
the grid. Delays in the performance of the interconnecting utility's
obligations to make such grid upgrades can negatively impact the financial
performance of the Company.
Operational Risks: The
Projects are subject to operating and technical risks, including risk of
mechanical breakdown, failure to perform according to design specifications,
labor and other work interruptions and other unanticipated events that
adversely affect operations. The success of each Project, once built, depends
in part upon efficient operations and maintenance.
Construction and Development
Risks: In some cases, the Company will invest in Projects before
construction is complete. Construction of any kind involves risk, including
labor unrest, bad weather, design flaws, the unavailability of materials,
fluctuations in the cost of materials, and labor shortages. Delays are common,
which could adversely affect the economics of the Company.
Equipment
Supply Constraints: The construction of renewable energy facilities relies
on the availability of certain equipment that may be in limited supply, such as
solar modules, trackers, inverters and monitoring systems. Much of this
equipment comes from China. There is no guarantee that the production of this
equipment will match demand, and this may adversely impact the ability to
construct and the cost of the Projects.
Finding Credible Development
Companies and Projects: Attracting and retaining relationships with
Development Companies who can originate Projects with quality Customers is
critical to the success of the Company (see "Investment Strategy"). If
we are unable to acquire a large enough volume of quality Projects, our
revenues may be lower than projected.
Risks
Associated with Investments Outside the U.S.: All of the Projects and
Loans will be in LATAM countries. Projects and Loans outside the United States
are subject to certain risks that generally do not apply to investments within
the United States. Such risks include:
Page 5
·
Historically, the markets of developing countries have been more
volatile than the markets of developed countries.
·
Developing countries may have less developed legal and accounting
systems. The legal systems of developing countries might be less reliable in
terms of enforcing contracts.
·
The governments of developing countries may be more unstable and
more likely to impose capital controls, nationalize a company or industry,
place restrictions on foreign ownership and on withdrawing money from the
country, and/or impose punitive taxes that could adversely affect prices.
·
The economies of developing countries may be dependent on
relatively few industries that are more susceptible to local and global
changes.
·
LATAM countries generally face security challenges, and the
Projects can be vulnerable to theft, vandalism, and damage. Ensuring robust
security measures is essential to mitigate these risks and protect Project
assets. If we are unable to properly secure the Projects, the Projects could be
negatively affected by crime, which could reduce our net income.
·
Development challenges, such as land acquisition, permitting
delays, and poor infrastructure, can hinder progress and increase costs of the
Projects. Navigating these obstacles is crucial to the successful development
of our Projects. Ineffective land acquisition practices, slow reaction to
permitting delays or selecting sites with poor infrastructure can negatively
affect the financial performance of the Projects and the Company.
·
Investments in controlled foreign corporations ("CFCs") by
United States persons are subject to tax and information reporting in the
United States, and certain local taxes paid may not be creditable under the
foreign tax credit rules. The United States may not have a tax treaty with a
LATAM nation in which a Project operates, which would give rise to the risk of
double taxation in certain circumstances.
Foreign Currency Exposure:
The customer contracts entered into by the Projects and/or any Loans we provide
may be denominated in foreign currencies and/or in United States dollars ("USD").
Contracts denominated in foreign currencies will be subject to
fluctuations in the exchange rates, which could hurt (or help) the Company's
returns. While the General Partner might be able to hedge the Company's foreign
currency exposure to some degree, such hedging may be expensive and may not be
entirely effective.
Imprecise Language
Translations: All of the Company's legal contracts in LATAM will be written
in English and either Portuguese or Spanish. Given that these languages have
different historical and cultural roots, it is possible that some of the clauses
and verbiage may not directly translate across languages and any deviation,
especially with respect to some of the more technical terms, may cause
misunderstandings that may negatively impact the business.
Risks
Upon Disposition of Investments: If the Company sells a Project, it
might be required to make representations about the business and financial
affairs of the Project, and to indemnify the purchaser if those representations
prove to be inaccurate or misleading. These arrangements may result in
contingent liabilities.
Regulatory Risks: Regulatory
risks pose significant challenges that can impact Project viability and
returns. Governments in LATAM countries may alter renewable energy policies,
tariffs, or incentive structures, affecting revenue and profitability. Delays
or changes in permitting and licensing requirements are common and can disrupt
construction and operational timelines. Additionally, grid interconnection
rules may change, or access may be delayed, complicating energy distribution
and contractual agreements. Shifts in political leadership can also lead to
regulatory uncertainty, with inconsistent enforcement or sudden policy changes which
could materially adversely affect our Projects.
Environmental compliance is
another critical factor, as varying laws and assessments across countries can
become stricter over time, potentially delaying or increasing Project costs.
Local content requirements in some countries may further complicate procurement
and raise expenses. Currency devaluation and tax policy changes also pose
risks, especially for cross-border investors.
Page 6
Unavailability of Insurance
Against Certain Catastrophic Losses: Certain losses of a catastrophic
nature, such as earthquakes, wars, terrorist attacks or other similar events,
may be either uninsurable or insurable at such high rates that to maintain such
coverage would cause an adverse impact on the related Project. As a result, not
all Projects may be insured against all possible risks. If a major uninsured
loss occurs, the Company could lose both the amount it invested in and
anticipated profits from the affected Project(s).
Potential Environmental
Liability: The Projects, like any large-scale physical plant, could cause
environmental contamination under some circumstances. Further, the SPEs (as
hereinafter defined) could be found liable for environmental contamination that
occurred before the Project was built. The cost of remediation and penalties
could be very large.
Liability for Personal Injury
and Damage to Property: The Company could be held liable for accidents and
injuries at the Project site. The SPEs will carry insurance to protect against
the potential losses, but the insurance might not be adequate.
Global or National Economic
Conditions: An economic slowdown in a country where we invest could affect
our Customers and/or Borrowers and therefore our Projects, Loans and Company
Investments.
No Participation in
Management: Investors will have no voting rights and no right to
participate in the management of the Company or the Projects. Instead, the
General Partner will make all decisions. You will have the ability to replace
our management team only under very limited circumstances, as described in "Summary
of LP Agreement and Authorizing Resolution."
Reliance
on Management: The success of the Company and its Projects will depend in
part on the skills of our General Partner and its management team. If our
General Partner fails to retain its key personnel, the Company and its
Investors could suffer.
Sale of
Other Securities: The Company could, at any time, sell classes of Company
shares other than those being offered by this Offering, for example, in a
private placement (including, but not limited to, the sale of Reg D Shares). A
different class of securities could have greater rights than those associated
with the Class A Investor Shares, including but not limited to preferential
rights to distributions.
Limitations
on Rights in Investment Agreements: To purchase Class A Investor Shares,
you are required to sign an investment agreement, in one of the forms attached
hereto depending on your preferred method of investment, which shall either be
the choice to (i) make a one time purchase of Class A Investor Shares, (ii)
make an initial purchase of Class Investor Shares, followed by subsequent of
purchases of Class A Investor Shares over a periodic basis or (iii) make an
initial purchase of Class A Investor Shares, followed by subsequent purchases
of Class A Investor Shares using the proceeds of distributions received from
the Company (such investment agreements, the "Investment Agreements").
The Investment Agreements will limit your rights in several important ways if
you believe you have claims against us arising from the purchase of your Class
A Investor Shares:
·
Any claims arising from your purchase of Class A Investor Shares
must be brought in the state or federal courts located in Wilmington, Delaware,
which might not be convenient to you.
·
You would not be entitled to recover any lost profits or special,
consequential, or punitive damages. However, that limitation does not apply to
claims arising under Federal securities laws.
Following your initial purchase
of Class A Investor Shares, you may to continue to participate in this Offering
by electing to either (i) establish with the Company, a plan for you to
automatically invest in the Offering on a periodic basis, subject to the terms
of an Auto-Invest Agreement signed by you and the Company or (ii) to reinvest
the distributions you receive from your Class A Investor Shares into the
purchase of additional Class A Investor Shares, subject to the terms and
conditions of the applicable Investment Agreement, signed by you and the
Company.
General Partner's Drag-Along
Rights: The General Partner may decide to sell the Projects or the Company
at any time. Should the General Partner decide to sell the Company, Investors
could be forced to sell their Class A Investor Shares at the direction of the
General Partner according to the General Partner's drag-along rights granted to
them in the LP Agreement (see "Summary of LP Agreement and Authorizing
Resolution.").
Page 7
Forum Selection Provision:
Our Investment Agreements and our LP Agreement both provide that disputes will
be handled solely in the state or federal courts located in the state of
Delaware. We included this provision primarily because (i) the Company is
organized under Delaware law, (ii) Delaware courts have developed significant
expertise and experience in corporate and commercial law matters and
investment-related disputes (which typically involve very complex legal
questions), particularly with respect to alternative entities (such as LPs),
and have developed a reputation for resolving disputes in these areas in an
efficient manner, and (iii) Delaware has a large and well-developed body of
case law in the areas of corporate and alternative entities law and
investment-related disputes, providing predictability and stability for the
Company and its Investors. This provision could be unfavorable to an Investor
to the extent a court in a different jurisdiction would be more likely to find
in favor of an Investor or be more geographically convenient to an Investor. It
is possible that a judge would find this provision unenforceable and allow an
Investor to file a lawsuit in a different jurisdiction.
Section 27 of the Securities Exchange
Act of 1934 (the "Exchange Act") provides that federal courts have
exclusive jurisdiction over lawsuits brought under the Exchange Act, and that
such lawsuits may be brought in any federal district where the defendant is
found or is an inhabitant or transacts business. Section 22 of the Securities
Act provides that federal courts have concurrent jurisdiction with State courts
over lawsuits brought under the Securities Act, and that such lawsuits may be
brought in any federal district where the defendant is found or is an
inhabitant or transacts business. Investors cannot waive our (or their)
compliance with federal securities laws. Hence, to the extent the forum
selection provisions of the Investment Agreements or the LP Agreement conflict
with these federal statutes, the federal statutes would prevail.
Waiver of Right to Jury Trial:
The Investment Agreements and the LP Agreement both provide that legal claims
will be decided only by a judge, not by a jury. The provision in the LP
Agreement will apply not only to an Investor who purchases Class A Investor
Shares in the Offering, but also to anyone who acquires Class A Investor Shares
in secondary trading. Having legal claims decided by a judge rather than by a
jury could be favorable or unfavorable to the interests of an owner of Class A
Investor Shares, depending on the parties and the nature of the legal claims
involved. It is possible that a judge would find the waiver of a jury trial
unenforceable and allow an owner of Class A Investor Shares to have his, her,
or its legal claim decided by a jury. In any case, the waiver of a jury trial
in both the Investment Agreements and the LP Agreement do not apply to claims
arising under the federal securities laws.
Conflicts of Interest: The
interests of the Company and the General Partner could conflict with the
interests of Investors in a number of ways, including:
·
Our General Partner and its officers perform similar roles for
other entities that are affiliated with the General Partner and are not
required to devote all of their time and effort to the Company and are only
required to devote such time to our affairs as their duties require.
·
Our General Partner will receive fees based, in part, on the
amount of cash flow the Company generates. The General Partner might,
therefore, have an incentive to raise more capital, and invest in more Projects
and Loans, than they would otherwise, leading them to invest in borderline
Projects and Loans.
·
The entire business of the General Partner consists of investing
in solar projects, including solar projects in LATAM. There could be conflicts
between Projects they decide to invest in through the Company and projects they
invest in through other vehicles.
Risk of Failure to Comply with
Securities Laws: The Offering relies on an exemption from registration with
the SEC pursuant to Regulation A. If the Offering did not qualify for exemption
from registration under the Securities Act, the Company could be subject to
penalties imposed by the federal government and state regulators, as well as to
lawsuits from Investors.
No Market for the Class A
Investor Shares; Limits on Transferability: There is currently no
established market for the Class A Investor Shares. An Investor who wishes to
sell or otherwise transfer their Class A Investor Shares may be limited
because:
·
There will be no established market for the Class A Investor
Shares, meaning the Investor could have a hard time finding a buyer for its
shares.
Page 8
·
Although the Company offers a Redemption Plan, there is no
guarantee that an Investor who wants to sell his, her, or its Class A Investor
will be able to do so.
·
Class A Investor Shares may not be transferred without the
Company's consent, which we can withhold in our sole discretion. The Company
also has a right of first refusal to purchase any Class A Investor Shares
proposed to be transferred.
Our
General Partner reserves the right to reject any Redemption Request for any
reason or no reason or to amend or terminate the Redemption Plan without prior
notice. Therefore, you may not have the opportunity to make a Redemption
Request prior to a potential termination of the Redemption Plan and you may not
be able to sell any of your Class A Investor Shares back to the Company
pursuant to the Redemption Plan. Moreover, if you do sell your Class A Investor
Shares back to the Company pursuant to the Redemption Plan, you may not receive
the same price you paid for the Class A Investor Shares being redeemed. In
addition, pursuant to our Redemption Plan, an Investor may only (a) have one
outstanding Redemption Request at any given time and (b) request that we redeem
up to $50,000 worth of Class A Investor Shares per each Redemption Request.
For more information regarding
the Redemption Plan, see "Redemption Plan".
"Best efforts-no minimum"
offering. The Offering is a "best efforts" basis and does not require a
minimum amount to be raised. This means that any investment made could be the
only investment in this Offering, leaving the Company without adequate capital
to pursue its business plan. If we are not able to raise sufficient funds, we
may not be able to fund our investment strategy as planned, and our growth
opportunities may be materially adversely affected. This could increase the
likelihood that an investor may lose their entire investment.
Corporate Governance Risk:
As a non-listed company conducting an exempt offering pursuant to Regulation A,
the Company is not subject to a number of corporate governance requirements
that an issuer conducting a registered offering or listed on a national stock
exchange would be. For example, the Company does not have (i) a board of
directors of which a majority consists of "independent" directors under the
listing standards of a national stock exchange, (ii) an audit committee
composed entirely of independent directors and a written audit committee
charter meeting a national stock exchange's requirements, (iii) a
nominating/corporate governance committee composed entirely of independent
directors and a written nominating/corporate governance committee charter
meeting a national stock exchange's requirements, (iv) a compensation committee
composed entirely of independent directors and a written compensation committee
charter meeting the requirements of a national stock exchange, and (v)
independent audits of the Company's internal controls.
The Company is an "Emerging
Growth Company" Under the JOBS Act: As of the date of this Offering
Circular, the Company qualifies as an "emerging growth company" under the JOBS
Act of 2012. If the Company were to become a public company (e.g., following a
registered offering of its securities) and continued to qualify as an emerging
growth company, it would be able to take advantage of certain exemptions from
the reporting requirements under the Exchange Act and exemptions from certain
investor protection measures under the Sarbanes Oxley Act of 2002. Using these
exemptions could benefit the Company by reducing compliance costs but could
also mean that Investors receive less information and fewer protections than
they would otherwise. However, these exemptions - and the status of the Company
as an "emerging growth company" in the first place - will not be relevant
unless and until the Company becomes a public reporting company.
The Company has elected to delay
complying with any new or revised financial accounting standard until the date
that a company that is not an "issuer" (as defined under Section 2(a) of the
Sarbanes-Oxley Act of 2002) is required to comply with such new or revised
accounting standard, if such standard also applies to companies that are not
issuers. As a result, owners of Class A Investor Shares might not receive the
same disclosures as if the Company had not made this election.
For example, because we are an
emerging growth company, you will not be able to depend on any attestation from
our independent registered public accounting firm as to our internal control
over financial reporting for the foreseeable future. Our independent registered
public accounting firm will not be required to attest to the effectiveness of
our internal control over financial reporting pursuant to Section 404 of the
Sarbanes-Oxley Act until the later of the year following our first annual
report required to be filed with the Commission or the date we are no longer an
"emerging growth company" as defined in the JOBS Act. Accordingly, you will not
be able to depend on any attestation concerning our internal control over
financial reporting from our independent registered public accounting firm for
the foreseeable future.
Page 9
Breaches of Security: It
is possible that our Platform, systems or the systems of third-party service
providers could be "hacked," leading to the theft or disclosure of confidential
information Investors provide to us. Because techniques used to obtain
unauthorized access or to sabotage systems change frequently and generally are
not recognized until they are launched, the Company, General Partner and our
service providers may be unable to anticipate these techniques or to implement
adequate defensive measures.
Unanticipated changes in our
tax laws that may impact us, the enactment of new tax legislation, or exposure
to additional income tax liabilities could affect our profitability: We are
obligated to comply with income tax laws in the regions where we operate,
including recent changes like the Inflation Reduction Act. These evolving tax
regulations could impact our financial health. We also face potential tax
audits that may result in additional tax assessments, with uncertain outcomes.
Changes to our effective tax rate, driven by shifts in our operational
structure, could have significant effects on our financial well-being.
The General Partner relies on
an exemption from registration as a broker-dealer: The General Partner
relies on an exemption from the Securities Exchange Act of 1934 in order to
conduct certain administrative activities on behalf of the Company in
connection with the Offering and as such, has not registered as a broker-dealer
either with the SEC or with the Financial Industry Regulatory Authority ("FINRA").
If the SEC or FINRA were interpret such exemption differently or to otherwise
determine that the General Partner has engaged in brokerage activities that
require registration, which may include the sale of the Class A Investor Shares
on the Platform, the General Partner may need to discontinue or suspend certain
operations, which would likely be harmful to its and the Company's business and
reputation. In addition, if the General Partner is found to have operated as a
'broker-dealer' without being properly registered, there is a risk that the Class
A Investor Shares offered and sold while the General Partner was not registered
may be subject to a right of rescission, which may result in the early
termination of the Offering. If a number of Investors were to obtain
rescission, the Company would face significant financial demands which could
adversely affect the Company as a whole, as well as any non-rescinding
Investors. An unregistered broker-dealer may also face sanctions, penalties and
enforcement actions by regulatory authorities.
The
price of Class A Investor Shares was determined by our General Partner (see "Price
of Class A Investor Shares"). The Company sells shares to raise capital for
the purchase and construction of Projects and to issue Loans. As new Investors
purchase Class A Investor Shares (or other classes of stock, see "Other
Concurrent Offerings"), existing Investors may be temporarily diluted until
new Projects are acquired and/or constructed and new Loans are originated and
contribute to monthly cash flow. Cash in treasury may be invested into Company
Investments to optimize yield and minimize the dilution impact. Such Company
Investments will not earn as high of a return as we expect to earn on our
investments in Projects and Loans.
Additionally, we may in the
future offer additional classes and/or series of Investor Shares (such as in
the Reg D Offering) or other securities convertible into or exchangeable for
such class or series of Investor Shares. Although no assurances can be given
that we will consummate a financing, in the event we do, or in the event we
sell additional classes and/or series of Investor Shares (such as in the Reg D
Offering) or other securities convertible into shares of our Class A Investor
Shares in the future, additional and substantial dilution will occur. In
addition, investors purchasing Class A Investor Shares or other securities in
the future could have rights superior to Class A Investor Shares Investors in
this Offering. Subsequent offerings at a lower price (a "down round") could
result in additional dilution.
The Company is offering to sell
up to $50,000,000 of Class A Investor Shares to the public. This Offering is
being conducted as a continuous offering pursuant to Rule 251(d)(3) of
Regulation A, meaning that while the offering of securities is continuous,
active sales of securities may happen sporadically over the term of the
Offering. Further, the acceptance of subscriptions, whether via the Platform or
otherwise, may be briefly paused at times to allow us to effectively and
accurately process and settle subscriptions that have been received.
Page 10
The Offering will commence as
soon as this offering statement is "qualified" by the SEC and will end on the
sooner of (i) a date determined by the Company, or (ii) the date the Offering
is required to terminate by law.
Only the Company is offering
securities in this Offering. None of our existing officers, directors, or
stockholders (including the General Partner) are offering or selling any of
their securities of the Company in this Offering.
The Company is not using an
underwriter or broker to sell the Class A Investor Shares and is not paying
commissions. Class A Investor Shares will be offered and sold only through the
Platform.
This is a "best efforts - no
minimum" offering. This means that the Offering does not have a minimum
threshold amount that we must raise before we can have a closing. Even if a
very small number of Class A Investor Shares are sold, the Company does not plan
to return funds to Investors.
The Company reserves the right to
reject any subscription to purchase Class A Investor Shares in this Offering in
whole or in part and for any reason (or no reason). If the Company rejects an
investment, it will promptly return all the Investor's money without interest
or deduction.
Anyone can buy Class A Investor
Shares. The General Partner does not intend to limit investment to people with
a certain income level or net worth, although there are limits on how much
non-accredited investors may invest in this Offering (see "Limit on the
Amount a Non-Accredited Investor Can Invest").
After the Offering has been
"qualified" by the SEC, the General Partner intends to advertise the Offering
using the Platform and through other means, including public advertisements,
social media and audio-visual materials, in each case, only as we authorize and
in compliance with the rules and regulations of Regulation A. Although these
materials will not contain information that conflicts with the information in
this Offering Circular and will be prepared with a view to presenting a
balanced discussion of risk and reward with respect to the Class A Investor
Shares, the advertising materials will not give a complete understanding of
this Offering, the Company, or the Class A Investor Shares and are not to be
considered part of this Offering Circular.
The Offering is made only by
means of this Offering Circular and prospective Investors must read and rely on
the information provided in this Offering Circular in connection with their
decision to invest in Class A Investor Shares.
In
addition to this Regulation A offering, the Company may conduct concurrent
private offerings of securities under Rule 506(c) of Regulation D of the
Securities Act of 1933. These private offerings (the "Reg D Offerings")
will be open exclusively to verified accredited investors and may be offered
through general solicitation and advertising, in compliance with applicable
securities laws. Each of these classes of Company shares ("Reg D Shares")
offered to investors participating in these private offerings (the "Reg D
Investors") shall participate in distributions with the Investors on a pari
passu basis.
Securities
sold pursuant to Regulation D will not be registered with the SEC and will be
subject to transfer restrictions.
Proceeds from the Regulation D offering will be combined
with proceeds from this Offering and used by the Company for the same common
purpose (see "Use of Proceeds").
We expect to use all of the net
proceeds of this Offering, after marketing expenses, to acquire, develop and
construct Projects and to issue Loans. Proceeds waiting to be invested into
Projects and Loans may be invested into Company Investments like government
bonds or money market accounts. The Company expects to use Offering proceeds to
fund new Projects and Loans. For more information regarding our investment
strategy, see "Description of Business-Investment Strategy". For more
information regarding current Projects and Loans, see "Description of
Property".
Page 11
We expect to pay for operating
expenses at the Company with cash flow from the Projects and Loans, but if the
Projects and Loans have not earned enough revenue to pay for any given
operating expense, the General Partner may use the proceeds from this Offering
to pay such operating expense. The types of operating expenses that the Company
expects to pay are described in "Our Operating Costs and Expenses".
The capital raised in this
Offering will not be used to compensate officers or directors because the
Company has no employees. However, Offering proceeds may be used to pay fees
owed to the General Partner and its affiliates (see "Compensation of General
Partner"). The Company does not expect to pay
fees to the General Partner from the proceeds of the Offering. Fees are instead
expected to be paid with revenue produced by the Projects, Loans and Company
Investments. However, it is possible that the revenue would be insufficient to
pay management fees, at which time, fees may be paid for from the proceeds of
this Offering.
The General Partner may make
short term advances to the Company to make payments on an as-needed basis. The
General Partner has also secured a loan on behalf of the Company. We do not
anticipate any additional sources of capital apart from funds from operations,
the advances, funds generated through this Offering (and other concurrent
offerings) and the loan to fund the Projects and Loans and to cover marketing
expenses.
It is important to note that no
capital will be allocated to any Project or Loan until it has received formal
approval from the Investment Committee and has been reported in accordance with
the appropriate procedures (see "Investment Committee").
We might invest in Projects or
Loans using the General Partner's capital before we have raised enough capital
from Investors. In that case, we will replace the General Partner's capital
with capital from Investors as soon as we raise it. To the extent the General
Partner or its affiliates invest capital, they will do so on the same price and
terms as other Investors (see "Compensation of General Partner").
The table below sets forth our
estimated use of proceeds from this Offering assuming we sell $50.0 million in
Class A Investor Shares. This is a "best effort" offering. This Offering does
not have a minimum to close. The Company is not paying commissions to
underwriters, brokers, or anyone else in connection with the sale or
distribution of the Class A Investor Shares. In some cases, retirement
custodians, investment advisers, and other intermediaries will offer to invest
on behalf of their clients. In such cases, the custodian, adviser, or
intermediary will be paid a fee from their client's invested funds. In such
cases, the client (rather than the Company) is paying those fees.
|
|
|
Maximum
Offering
|
|
10% of Maximum
|
|
25% of Maximum
|
|
50% of Maximum
|
|
|
|
|
Amount (1)
|
|
Amount
|
|
Amount
|
|
Amount
|
|
|
Gross Offering Proceeds
|
|
$
|
50,000,000
|
|
5,000,000
|
|
12,500,000
|
|
25,000,000
|
|
Less Marketing Expenses (1)
|
|
$
|
2,500,000
|
|
250,000
|
|
625,000
|
|
1,250,000
|
|
Net Proceeds from this Offering
|
|
$
|
47,500,000
|
|
4,750,000
|
|
11,875,000
|
|
23,750,000
|
|
Estimated Amount Available for Projects and Loans
|
|
$
|
47,500,000
|
|
4,750,000
|
|
11,875,000
|
|
23,750,000
|
|
TOTALS
|
|
$
|
50,000,000
|
|
5,000,000
|
|
12,500,000
|
|
25,000,000
|
(1) The Company
will reimburse the General Partner in an amount up to 5% of proceeds from this
Offering to pay for organization and offering expenses, including marketing
expenses. Any such amounts in excess of such 5% will be paid, without
reimbursement, by the General Partner.
The Company reserves the right to
change the above use of proceeds without notice if the General Partner believes
it is in the best interests of the Company.
Page 12
The Company's
offices are located at 52 Main Street, Chester, CT 06412. The Company itself
has no employees. Rather, the Company has engaged the General Partner to manage
the Company and utilizes employees and services provided by the General Partner
as described more fully in the section "Directors, Executive Officers &
Significant Employees".
Energea Portfolio 5 LATAM LP is a limited partnership, treated as a "C" corporation for
United States federal and state income tax purposes, and organized under the
laws of Delaware as of August 7, 2023. The Company and its day-to-day
operations are managed by Energea Global LLC (the "General Partner"
or "Energea Global"). The Company was created to invest in the
acquisition, development, and operations of solar energy projects in LATAM
(each a "Project"). The Company may also lend money to Development
Companies and use solar projects as collateral rather than acquiring Projects
for direct ownership (each a "Loan"). As of the date of this Offering
Circular, we have not yet begun operations other than those associated with
general start-up and organizational matters. We currently do not have any
Projects and we have not received payments on the one (1) Loan we have made and
therefore we have not generated any revenue (see "Description of Property").
The primary sources of revenue
for the Company will come from payments made by customers who buy energy from
the Projects ("Customers") and borrowers who make principal and interest
payments on Loans ("Borrowers"). The Company's profitability depends on
generating revenues from Projects and Loans that exceed the operating costs
(see "Our Operating Costs and Expenses").
We expect that Projects will be
owned by special-purpose entity (each a "SPE"). We anticipate that each
SPE will be organized in the country where the Project is located.
The Company generally plans to
hold the Projects indefinitely, creating a reliable stream of cash flow for
Investors. Should the Company decide to sell Projects in the future, however,
the General Partner would consider the following factors:
·
Yield and Cashflow: Many investment funds look for
reliable cashflows generating a targeted yield. With both revenue and most
expenses locked in by contract, the cash flow from any Project should be
predictable and consistent for as long as 25 years.
·
Project Consolidation: Some of the Projects will be too
small or unusual for institutional buyers to consider purchasing on their own.
The Company could package these Projects into a larger, more standardized
portfolio that will be attractive to these larger, more efficiency-focused
players. In the aggregate, a portfolio of Projects might be expected to
generate 50+ megawatts of power with relatively uniform power contracts,
engineering standards, and underwriting criteria. A portfolio of that size can
bear the fees and diligence associated with an institutional-grade transaction
or securitization.
·
Cash Flow Stabilization: When the Company buys a Project,
it will typically share the construction or repowering risk with the
Development Company that originated the Project. Larger investors are generally
unwilling to take on construction risk and will invest only in Projects that
are already generating positive cash flow, referred to as "stabilization".
Thus, the Company may acquire Projects before stabilization and sell them after
stabilization. Institutional investor interest in the Portfolio should increase
as the portfolio stabilizes.
·
Increase in Residual Value: When the Company acquires a
Project, the appraisal will be based solely on the cash flows projected from
executed Power Purchase Agreement (see "Summary of Supporting Contracts"),
with no residual value assumed for the Project. We believe that there is a high
probability that a Project will continue to create revenue after its initial
contract period in the form of a contract extension, repositioning, or sale of
energy into the merchant energy markets. This creates a sort of built-in "found
value" for our Projects, which may be realized upon sale.
Page 13
The Company will source most of its
Projects from other companies who specialize in developing solar projects in
LATAM ("Development Companies"). The Company's relationship with
Development Companies may take several different forms. A Development Company
might: (i) identify a potential project and permit, engineer and construct it,
(ii) provide operations and maintenance support for a Project after it is built
or (iii) sell a Project to us and exit entirely.
Development Companies are
compensated for their work and their risk. As of the date of this Offering
Circular, the General Partner does not own a Development Company in LATAM and as
of the date hereof, and in the future, the Company expects to acquire all
Projects from unrelated Development Companies. The General Partner may create
or acquire a Development Company if Projects from third parties become
overpriced, if an exceptional market opportunity presents itself or if deal
flow is slow and we require additional development capacity. If the Company
were to acquire a Project from a Development Company that is related to the
General Partner or an affiliate of the General Partner, we will cap the
related-party origination fee at 5.0% of the overall Project's cost, which we
believe is below the standard market rate for developing a Project (see "Compensation
of General Partner").
The General Partner reviews
Projects submitted by the Development Companies and seeks to identify Projects
that we believe represent the greatest opportunity for potential risk-adjusted
returns. We are specifically searching for Projects in countries with what we
believe to be favorable economic conditions, large addressable markets and
well-defined renewable energy policies, like Colombia, Panama, Chile, Uruguay
and Costa Rica. Our preference would be to invest in Projects with credible
Customers, albeit adjusted for the context of LATAM economies.
We expect to invest primarily in
Projects with the following characteristics:
·
Locations: We select locations based primarily on:
o Demand for
alternative energy;
o Efficient
access for maintenance;
o Interconnection
points with the electricity grid;
o Acceptable
security risks. The Company tries to avoid selecting Projects in
locations with high crime areas which could expose the Project to an increased
risk of theft and vandalism;
o Solar
irradiance; and
o Country and local-level
policies that enable the development of renewable energy projects.
·
Right to Site: We expect that some Projects to be owned by
the Company will be installed on Customer's rooftops, while others will be
located on remote parcels of real estate. In either scenario, the Company, and
more specifically, the SPE, will obtain rights to access the Project to
construct and maintain the Project ("Site Access"). For rooftop
Projects, Site Access is most-commonly granted through the Power Purchase
Agreement with the Customer. For Projects on remote real estate, the SPE will
either purchase or lease the property to ensure adequate Site Access is
obtained.
·
Operation and Maintenance: The SPEs will hire a company to
perform some or all of the services necessary to maintain each Project in good
working order. This includes preventative maintenance (such as inverter
diagnostics, cleaning inverter fans and string testing), emergency maintenance
(which is when a technical crew is dispatched to a Project to address an
unexpected issue that occurred in the field), modules cleaning, site security
and landscaping.
·
Connecting Projects to the Electric Grid: Most Projects
acquired or constructed by the Company will require permission to interconnect
to the local electric grid ("Interconnection"). This permission is
granted by the local interconnecting utility company through an interconnection
agreement and an associated permission to operate. In the case of certain
smaller projects, interconnection rights may be granted through national and
utility policy and not require an individual interconnection agreement.
Page 14
·
Minimum Technical Requirements ("MTR"):
All technical aspects of each Project we invest in must meet the Company's MTR.
The MTR is a comprehensive list of all venders and equipment makes/models which
have gotten through the General Partner's due diligence process and are
acceptable for use in the Projects. We analyze venders and the equipment they
make to predict the field performance of the equipment and the financial
strength behind warranties and guarantees. In addition to tracking venders and
materials used in the construction, we also track best installation practices
through the MTR. Each Project leaves lessons learned, and those lessons are
incorporated into the collective memory of the General Partner by being added
to the best practices component of the MTR.
·
Country-Level Policies and Environmental Commodities: Some
countries in LATAM have certain policies to promote the development of
renewable energy projects. There are a wide range of policy types that include
carbon credits, property and sales tax exemptions, net metering and community
solar (referred to as "DG" in the Colombian context). The Company will seek to
optimize those country-level policies with the belief that it will increase the
expected return on investment for Investors which may include transactions with
third parties to monetize carbon and renewable energy credits.
·
When the Company Invests in Projects: Normally, the
Company will not invest in a Project until the applicable contracts named above
in Rights to Site and Connecting Projects to the Electric Grid have
been negotiated and executed.
Thus, in most cases, Investors
are not exposed to significant Project-level risks until all these agreements
are executed. However, the General Partner might make exceptions for Projects
which we believe to be exceptionally promising. The General Partner will have
sole discretion over whether to acquire or invest in a Project. See "Risk
Factors" for more information.
The
Company intends to provide Loans to Borrowers in LATAM or with U.S. companies
that do business in LATAM. Borrowers will usually be Development Companies or single-purpose
entities which own solar projects. These Loans will be designed to finance the
development of new solar energy projects while relying on the credit of
existing projects or other collateral that rests on the balance sheet of the
Borrower as collateral. Each time a new project reaches commercial
operation; it contributes to the Borrower's overall collateral which allows the
Company to extend additional credit to the Borrower.
·
Loan Issuance: As the Company raises capital through this Offering, the
General Partner may lend some or all of it to Borrowers each month. Each
disbursement will be amortized on a separate amortization schedule which
adheres to the terms and conditions of the Loan Agreement (see "Summary of
Supporting Contracts").
· Collateral: The
Loans will be senior debt and collateralized by a pledge of the shares in the
Borrower's enterprise which includes solar projects held on the corporate
balance sheet. Thus, by serving as the sole lender to a Borrower, the solar
projects act as the primary form of collateral. As Loans are issued, the
Borrower will use the loan proceeds to develop and construct more projects
which are added to the overall collateral calculations.
As the Projects achieve commercial operation, the
Borrower's customer will begin to make payments to our Borrower for energy
produced by the Projects. In some cases, payments from the customers to our
Borrower will be made directly to a segregated account controlled by the
Company. As a condition to close a Loan, the Borrower will grant the Company
controlling rights to the trust account and/or collateralized assets, in the
event of a default, the General Partner can easily step into the Borrower's
cash flow to prevent revenue leakage during a default event. We believe
the Company will be particularly well-suited to issue Loans when solar projects
act as collateral due to our General Partner's extensive experience owning and
operating solar projects.
·
Loan Management: The General Partner will oversee the performance and
compliance of Borrowers and the associated collateral. Their responsibilities
include continuous monitoring of construction progress, energy production and
cash flows to help ensure that loan terms are met. By working closely with the
Borrowers and their projects, we expect to mitigate risks associated with
project delays and underperformance which could impair the Borrower. Close
scrutiny of underlying projects during due diligence and loan servicing will
also ensure an efficient step-in during a default scenario.
Page 15
When we find a Project or Loan
that meets the fundamental criteria described above, we consider the
opportunity at a multi-disciplinary committee of experienced renewable energy
executives of the General Partner ("Investment Committee"). To approve a
Project or Loan for funding, a unanimous approval of the investment by the
Investment Committee is required to move forward. A copy of the memorandum
prepared by the General Partner for each Project or Loan will be provided to
Investors on the Platform and in our filings with the SEC through "Form 1-U"
and 253(g)(2) filings. As of the date of this Offering Circular, the Investment
Committee consists of the members outlined in the table below:
|
Name
|
Title
|
Due Diligence
Responsibility
|
|
Arthur
Issa /
Daniel
Chavez
|
Financial Analyst
|
Review
historical financials and prepare projections for each Project and Loan
incorporating cash flow, tax, technical and energy market variables.
|
|
Dave Rutty
|
Project Analyst
|
Compiles the IC Memos for
Projects.
|
|
Francielle
Assis
|
HR & HSEC Legal Coordinator
|
Examines
the area where a Project is located for environmental, emergency services and
community-related risk factors.
|
|
Isabella Mendonca
|
General Counsel
|
Examine and/or prepares all
documents related to a Project or Loan to ensure contracts meet Energea
Global's requirements.
|
|
Juan
Carvajales
|
Loan Analyst
|
Compiles
the IC Memo for Loans.
|
|
Julio Cezar
dos Santos de Morais
|
Electrical Engineer
|
Ensures all Projects meet our
MTR. Produces a "punch list" of failures to be remedied if necessary.
|
|
Mike
Silvestrini
|
Managing Partner
|
Originates
and negotiates most investment opportunities.
|
|
Paulo Vieira
|
Director of Operations & Maintenance
|
Confirms cost and strategy for
operating and maintaining Project investments.
|
The General Partner is actively evaluating
several solar markets across LATAM, with a particular focus on distributed
generation opportunities that align with the Company's investment strategy.
These include a range of Projects-from rooftop and behind-the-meter systems to
larger installations up to 10 MW-that deliver power directly to large
commercial and industrial users, utilities, or end customers through structured
"community solar" programs ("DG"). As demand grows across the region for
affordable, clean, and resilient power, we believe that the DG segment presents
a compelling opportunity to deploy capital efficiently while maintaining high
standards for risk management and yield.
LATAM presents a diverse landscape for DG
solar investment, shaped by strong solar irradiance, evolving regulatory
support, rising electricity demand, and a growing private-sector appetite for
decarbonization. The General Partner is currently prioritizing markets such as
Colombia, Chile, Panama, and select Caribbean nations-each offering different
catalysts for DG development. While the opportunity set is broad, the General
Partner follows a deliberate, memo-driven process and will publish a formal
market analysis prior to making any investments-either in Projects or Loans-in
any new market. These memos include thorough evaluations of the local
regulatory environment, counterparty risk, solar economics, financing
conditions, and alignment with the Company's core investment objectives.
Colombia is the first approved market in
our portfolio due to what we believe to be a combination of compelling policy
support and strong fundamentals in the DG space. With a grid historically
reliant on hydropower and increasingly exposed to climate-driven variability,
Colombia is actively diversifying its energy mix. The regulatory foundation,
including Law 1715, has enabled solar development through favorable net
billing, tax incentives, and long-term power purchase agreements. The DG
market, in particular, is supported by rising demand from large energy users
seeking reliability and cost savings - whether through on-site installations,
private PPAs, or community-based solar participation. We believe these conditions
make Colombia an ideal starting point for the Company.
Page 16
We believe that Chile also presents a
mature DG opportunity set, with some of the best solar irradiance in the world
and a transparent, liberalized energy sector. The market supports both net
billing and merchant DG models, with promising potential in commercial-scale systems
and hybrid storage applications. We believe that Panama, while more modest in
scale, offers a stable macroeconomic backdrop, dollarized currency, and recent
regulatory advances in net metering and renewable incentives that support commercial
solar uptake. Select Caribbean markets - such as the Dominican Republic,
Jamaica, and Barbados - are pursuing aggressive clean energy transition plans,
and DG projects in those countries are expected to offer high avoided-cost
economics in diesel-dependent grids, often backed by multilateral climate
finance.
While the General Partner continues to
explore these markets, investment activity will be limited to jurisdictions
where a full market memo has been completed, reviewed, and approved. These
memos serve as the foundation for all subsequent Project or Loan originations,
ensuring that every investment is grounded in analysis and aligned with the
Company's strategic mandate.
The following table highlights the first
approved market-Colombia-along with its corresponding Investment Committee memo
which details the General Partner's analysis and due diligence of the market:
|
Location
|
Product
|
Target
Investment
|
Market
Analysis
|
|
Colombia
|
Helios Loan*
|
$100,000,000*
|
* The Helios Loan is
a revolving Loan and this amount represents the aggregate amount of loans which
may be made under the Helios Loan. The Company has the right but not the
obligation to fund amounts under the Helios Loan.
Our net income will depend, in
large part, on our ability to source, acquire and manage investments with
attractive risk-adjusted yields. We expect to compete with many other entities
engaged in renewable energy in the LATAM market, including individuals,
corporations, and private funds, many of which have greater financial resources
and lower costs of capital than we have.
There
are numerous companies with investment objectives similar to ours. That said,
the industry is going through a consolidation phase where a large pool of
market participants is being consolidated into a smaller group of "successful"
enterprises. Thus, we believe that we will have fewer competitors today than we
would have had five years ago, but those competitors are generally larger and
more sophisticated than those that have folded or sold their position in the
market.
Competitive
variables include market presence and visibility, amount of capital to be
invested per Project and underwriting standards. To the extent that a
competitor is willing to risk larger amounts of capital in a particular
transaction or to employ more liberal underwriting standards when evaluating
potential investments than we are, our investment volume and profit margins
could be impacted. Our competitors may also be willing to accept lower returns
on their investments and may succeed in buying the Projects that we have
targeted for acquisition.
Although
we believe that we are well-positioned to compete effectively in each facet of
our business, there is competition in the market and there can be no assurance
that we will compete effectively or that we will not encounter increased
competition in the future that could limit our ability to grow the portfolio in
the future and conduct our business effectively.
The revenue will come from our
Projects and the interest portion that we will receive from Borrowers on our
Loans as well as the interest we may earn from any Company Investments. The
Company expects to generate cash flow by opportunistically selling Projects,
assigning Loans to other parties, and collecting Liquidated Damages from
contractors.
Our Revenue Recognition Policy
follows ASC-606 which is a five-step procedure:
|
Procedure
|
Example
|
|
Step
1 - Identify the Contract
|
Power
Purchase Agreement or Loan Agreement
|
|
Step 2 - Identify the
Performance Obligations
|
Delivery of electricity from
solar plant or the issuance of debt
|
|
Step
3 - Determine the Transaction Price
|
Amount
contractually signed with Customer or Borrower
|
|
Step 4 - Allocate the
Transaction Price
|
Obligation is satisfied by
transferring control of the electricity produced to the Customer
|
|
Step
5 - Recognize Revenue
|
At a
point in time when the Customer or Borrower is invoiced
|
Page 17
The Company expects to incur a variety of costs and
expenses, including:
·
banking fees;
·
legal expenses;
·
payments to the General Partner for fees;
·
fees to wire money from LATAM countries to the U.S.;
·
payments to U.S. states to comply with their respective
securities law ("Blue Sky Laws");
·
debt service and transactional payments (where we borrow money at
the Company level);
·
annual financial audit expenses;
·
U.S. taxes;
·
LATAM taxes.
The Projects will also incur a variety of costs and
expenses, including:
·
payments to third parties to operate and maintain the Projects;
·
lease payments to landowners;
·
debt service and transactional payments (where we borrow money at
the Project level);
·
utilities;
·
on-site security;
·
payments to the third party that manages customer electric bill
credits;
·
taxes paid to LATAM governments;
·
banking fees;
·
trust fees;
·
project insurance.
To date, the Company has paid $34,705.89
in expenses.
Page 18
This Offering Circular is not
providing, or purporting to provide, any tax advice to Investors. Every
potential Investor is advised to seek the advice of his, her or its own tax
professionals before making this investment. The securities sold in this Offering
may have issues related to taxation at many levels, including tax laws and
regulations at the state, local and federal levels in the United States, and at
all levels of government in non-U.S. jurisdictions.
It is impractical to comment on
all aspects of federal, state, local and foreign tax laws that may affect the
tax consequences of participation in the Company. Therefore, each prospective
Investor should satisfy himself, herself or itself as to the tax consequences
of participating in the Company by obtaining independent advice from his, her
or its own tax advisers. Furthermore, while the Company will furnish to you any
information required to be provided to you under applicable tax laws,
preparation and filing of each Investor's tax returns shall be such Investor's
responsibility.
The following summarizes certain
federal income tax consequences of acquiring Class A Investor Shares. This
summary is based on the current tax laws of Colombia, the current U.S. Internal
Revenue Code of 1986, as amended (the "Code"), the Treasury regulations
issued by the Internal Revenue Service ("Regulations"), and current
administrative rulings and court decisions, all as they exist today. All of
these tax authorities could change in the future (and such change may possibly
be retroactive so as to result in different U.S. federal income tax
consequences from those set forth below).
This is only a summary,
applicable to a generic Investor. Your personal situation could differ. We
encourage you to consult with your own tax advisor before investing.
Interest and other income received by the
Company from sources within Colombia, including payments under Loans or other
credit arrangements, may be subject to Colombian withholding tax. Under current
law, interest paid to non-resident lenders is generally subject to a
withholding tax rate of 15%, subject to exceptions or reductions under
applicable tax treaties or special regimes. Capital gains realized by the
Company on the sale or disposition of certain Colombian assets may also be
subject to Colombian income or capital gains tax at a rate of 10%, depending on
the nature and situs of the asset, and whether any treaty relief is available.
Dividends distributed by Colombian
entities to the Company may be subject to Colombian dividend withholding tax at
a rate of 10% if paid from profits previously taxed at the corporate level, or
at a higher grossed-up rate if paid from untaxed profits. Value-added tax ("VAT")
is generally not imposed on interest or loan principal payments, but certain
services provided in Colombia may be subject to VAT, currently at a standard
rate of 19%, depending on the location and nature of the service.
The tax treatment of the Company's income
from Colombia will depend in part on the nature of its investments, the
characterization of such income under Colombian law, and the Company's ability
to avoid creating a taxable presence in Colombia. Investors should be aware
that Colombian tax laws are subject to change and may be interpreted or applied
in a manner that results in adverse tax consequences to the Company or the Investors.
Investors are urged to consult their own tax advisors regarding the Colombian
tax consequences of an investment in the Company in light of their particular
circumstances.
Please note that any investment in any
other LATAM countries may have different tax effects than those described
herein with respect to Colombia.
The
following is a summary of certain material United States federal income tax
consequences of the ownership and disposition of the Class A Investor Shares
but does not purport to be a complete analysis of all the potential tax
considerations relating thereto. Except as explicitly set forth below,
this discussion is limited to U.S. Holders (defined below) who hold the Class A
Investor Shares as capital assets within the meaning of Section 1221 of the
Code. This summary does not address the tax considerations arising under the
laws of any United States state or local or any non-United States jurisdiction
or under United States federal gift and estate tax laws. In addition, this
discussion does not address tax considerations applicable to an Investor's particular
circumstances or to Investors that may be subject to special tax rules.
Page 19
As used herein, the term "U.S.
Holder" means a beneficial owner of the Class A Investor Shares that is,
for U.S. federal income tax purposes, an individual citizen or resident of the
United States, a corporation (or any other entity taxable as a corporation for
U.S. federal income tax purposes) created or organized in or under the laws of
the United States or any state or political subdivision thereof or the District
of Columbia, an estate the income of which is subject to U.S. federal income
taxation regardless of its source, or a trust, if a court within the United
States is able to exercise primary supervision over the administration of the
trust and one or more U.S. persons control all of the substantial decisions of
the trust or if a valid election is in place to treat the trust as a U.S.
person.
In addition, if a partnership, including any entity or
arrangement, domestic or foreign, classified as a partnership for United States
federal income tax purposes, holds Class A Investor Shares, the tax treatment
of a partner generally will depend on the status of the partner and upon the
activities of the partnership. Accordingly, partnerships that hold Class A
Investor Shares, and partners in such partnerships, should consult their tax
advisors.
The Company is a Delaware limited
partnership but has affirmatively elected to be treated as a corporation under
Subchapter C of the Code for federal income tax purposes. Thus, the Company
will be taxed at regular corporate rates on its income before making any
distributions to holders of Class A Investor Shares as described below.
The General Intangible Low-Tax Income ("GILTI")
tax on foreign investments is more favorable to our investors under a corporate
tax structure as opposed to a partnership, where the tax on international
assets would be levied on individuals. Under a partnership, an investor would
be responsible for 37% of all foreign profits generated from an international
investment. A corporate tax structure allows the corporation to realize foreign
tax credits. Under this corporate tax reporting structure, the corporate entity
would only pay 21% tax on 50% of the foreign profits after foreign tax credits
have been applied.
The income of the Company will
consist primarily of cash available for distribution ("CAFD") received
from the SPE in the form of a dividend. Because the SPEs will be foreign
corporations, these dividends will be "non-qualified dividends" within the
meaning of the Code and therefore subject to tax at ordinary income tax rates
("qualified dividends," including dividends from most U.S. corporations, are
subject to tax at preferential rates).
The Company, but not the
Investors, might be entitled to credits for taxes paid by the SPEs in LATAM.
Taxes imposed in LATAM which are not imposed on income may not receive a
foreign tax credit.
Distributions to U.S. Holders out
of the Company's current or accumulated earnings and profits, if any, will be
taxable as dividends. A non-corporate U.S. Holder who receives a distribution
constituting "qualified dividend income" may be eligible for reduced federal
income tax rates. U.S. Holders are urged to consult their tax advisors
regarding the characterization of corporate distributions as "qualified
dividend income." Dividends received by a corporate U.S. Holder may be eligible
for the corporate dividends-received deduction if certain holding periods are
satisfied. Distributions in excess of the Company's current and accumulated
earnings and profits will not be taxable to a U.S. Holder to the extent that
the distributions do not exceed the adjusted tax basis of the U.S. Holder's
Class A Investor Shares. Rather, such distributions will reduce the adjusted
basis of such U.S. Holder's Class A Investor Shares. Distributions in excess of
current and accumulated earnings and profits that exceed the U.S. Holder's
adjusted basis in its Class A Investor Shares will be taxable as capital gain
in the amount of such excess if the Class A Investor Shares are held as a
capital asset. In addition, Section 1411 of the Code imposes on individuals,
trusts and estates a 3.8% tax on certain investment income (the "3.8% NITT").
Page 20
Upon any taxable sale or other
disposition of Class A Investor Shares, a U.S. Holder will recognize gain or
loss for federal income tax purposes on the disposition in an amount equal to
the difference between the amount of cash and the fair market value of any
property received on such disposition; and the U.S. Holder's adjusted tax basis
in the Class A Investor Shares. A U.S. Holder's adjusted tax basis in the Class
A Investor Shares generally equals his or her initial amount paid for the Class
A Investor Shares and decreased by the amount of any distributions to the
Investor in excess of the Company's current or accumulated earnings and
profits. In computing gain or loss, the proceeds that U.S. Holders receive will
include the amount of any cash and the fair market value of any other property
received for their Class A Investor Shares, and the amount of any actual or
deemed relief from indebtedness encumbering their Class A Investor Shares. The
gain or loss will be long-term capital gain or loss if the Class A Investor
Shares are held for more than one year before disposition. Long term capital
gains of individuals, estates and trusts currently are taxed at a maximum rate
of 20% (plus any applicable state income taxes) plus the 3.8% NIIT.
The Code imposes an alternative
minimum tax on individuals and corporations. Certain items of the Company's
income and loss may be required to be taken into account in determining the
alternative minimum tax liability of Investors.
The Company will report its
income and losses using the calendar year.
The Company will furnish each
Investor with the information needed to be included in his or her federal
income tax returns, if any; provided, however, the Investors shall be
responsible for determining their adjusted basis in their respective Class A
Investor Shares. Each Investor is personally responsible for preparing and
filing all personal tax returns that may be required as a result of his
purchase of Class A Investor Shares. The tax returns of the Company will be
prepared by accountants selected by the Company.
If the tax returns of the Company
are audited, it is possible that substantial legal and accounting fees will
have to be paid to substantiate our position and such fees would reduce the
cash otherwise distributable to Investors.
Each Investor must either report
Company items on his or her tax return consistent with the treatment on the
information return of the Company or file a statement with his tax return
identifying and explaining the inconsistency. Otherwise the IRS may treat such
inconsistency as a computational error and re-compute and assess the tax
without the usual procedural protections applicable to federal income tax
deficiency proceedings.
The Code imposes interest and a
variety of potential penalties on underpayments of tax.
The foregoing discussion
addresses only selected issues involving Federal income taxes and does not
address the impact of other taxes on an investment in the Company, including
federal estate, gift, or generation-skipping taxes, or State and local income
or inheritance taxes. Prospective Investors should consult their own tax
advisors with respect to such matters.
The Company will cause the SPEs
to enter into six (6) main contracts for each Project:
Page 21
·
Purchase and Sale Agreements: When the General Partner
identifies a project that it believes, in its sole discretion, meets the
investment criteria of the Company, it signs a "Purchase and Sale Agreement"
to acquire the rights to the Project from a Development Company.
·
Power Purchase Agreements: In all cases, the SPEs will
sell electricity produced by the Projects to Customers pursuant to a contract
we refer to as a "Power Purchase Agreement" or a "PPA".
·
Purchase and Sale Agreements for Environmental Commodities:
In some cases, the SPEs will sell environmental commodities produced by the
Projects to third parties pursuant to a contract we refer to as an "Purchase
and Sale Agreement for Environmental Commodities".
·
Construction Contracts: To build the Projects, the
SPE will hire a third party to provide engineering, procurement, and
construction services pursuant to a contract referred to as a "Construction
Contract".
·
Project Maintenance Contracts: The SPE will then hire a
third party to operate and maintain the Projects pursuant to a contract we
refer to as a "Project Maintenance Contract".
Although the final terms and
conditions and contract title will most likely differ from Project to Project,
we will attempt to ensure that the rights and obligations of the parties will
generally be consistent across all of the Projects. However, there is no
assurance that we will be able to negotiate consistent terms, and the terms and
conditions of each contract may contain material differences.
The Company will enter into three
(3) main contracts when making a Loan to a Borrower:
·
Loan Agreement: A Loan Agreement ("Loan Agreement")
is a contract where the Lender provides funds to a Borrower up to a specified
limit over a set borrowing period. The Borrower uses these funds to construct
new solar projects. The Borrower grants the Lender a first-priority lien on all
its assets as collateral, including the solar projects. The agreement includes
conditions for advances, default triggers, and remedies for the Lender, with
covenants ensuring compliance and asset segregation.
·
Collateral Agreements: The "Collateral Agreements"
are a collection of agreements and instruments designed to secure obligations
under a Loan Agreement between a Borrower and the Company. These documents
collectively establish, and perfect the Company's security interests in various
assets and equity interests of the Borrower and related parties. They may
include personal guarantees, corporate guarantees, promissory notes outlining
repayment terms, and pledge agreements granting the Company priority liens on
specific collateral. Supporting resolutions and certificates confirm the
Borrower's authorization and compliance. The Collateral Agreements address
repayment conditions, default remedies, rights over collateral, and ensure the
Company's enforcement capabilities while defining limits on recourse where
applicable.
·
Trust Agreement: Some, but not all, Loans will also have a
"Trust Agreement". In circumstances where the General Partner requires
more fiscal oversite over a Borrower, we will set up a trust which will receive
all of the Borrowers revenue (usually payments for energy from their
customers). The General Partner will instruct the Trustee to pay principal
and/or interest payments owed to the Company prior to distributing the
remaining cash to the Borrower for their use in operations.
The Company is presenting its
first offering circular for qualification by the SEC. As this is the Company's
initial offering, no funds have been raised and no shares have been issued to
date except those issued to the General Partner for investments made into the
Company to cover start-up costs and to fund expenses associated with the first
Loan.
Page 22
As of the date of this Offering
Circular, neither the Company, nor any of the Company's SPEs are currently involved
in any material legal proceedings.
A comprehensive discussion on
risks of investing in the Company can be found at the beginning of this
Offering Circular. Below are risks that we believe deserve specific attention,
as they have the highest likelihood of impacting Investor returns. Following
each risk is a brief description of mitigating strategies to be employed by the
General Partner:
- Solar Irradiance: Energea Global forecasts the energy production of each Project based on historical weather patterns. A deviation from historical weather patterns could result in lower-than-expected electrical production and decreased dividends. Projected returns use a P-50 production estimate. P-50 is an estimate of electrical production where there is a 50% statistical probability that the Project will produce more electricity and a 50% probability that the Project will produce less. This is an industry standard method of weather prediction and production estimating.
- Mitigating Strategy: Diversifying across many Projects and different geographical markets helps to mitigate the solar irradiance risk of any specific Project. The Projects are impossible to predict one day to the next, but over a year, it is actually quite predictable for experienced managers. Loans carry a lower exposure to solar irradiance than Projects. A "debt service coverage ratio" is designed to "make room" for the collateral to underperform and still make the debt service payment as scheduled. While the effects of solar irradiance on Projects in the short term are almost impossible to predict, we believe that in the long term the effects of solar irradiance become more predictable.
- Theft / Damage: The equipment may be subject to theft or damage which is beyond the Company's control.
Mitigating Strategy:
Energea Global always carries insurance to protect against major loss. We carry
property insurance to cover theft or unexpected damage to the equipment as well
as business interruption insurance to cover lost income during Project
downtime. Many of the Projects are on Customer's rooftops where they enjoy some
level of protection. Loans are less exposed to theft and damage losses.
- Construction: There is a risk that the Project could encounter unforeseen delays or costs during the construction phase that could potentially delay dividends and result in a lower-than expected IRR.
- Mitigating Strategy: All Construction Contracts (see summary of "Summary of Supporting Contracts") have liquidated damages clauses. Liquidated damages hold the contractor building the Project responsible for any lost revenue resulting from construction delays. However, the Company may be unable to capture liquidated damages from contractors, which would result in lost revenue for the Company. The Company also acquires all Projects on a fixed-price basis to limit our exposure to cost overruns during construction.
- Customer Default: The primary source of revenue from Projects and Loans will come from long-term Purchase Power Agreements and Loans. There is a risk that an entity could default on the Purchase Power Agreement or Loan.
- Mitigating Strategy: Energea Global carefully evaluates the credit risk of the Customers and Borrowers. Most of the contracts with the Company or SPEs will be with large utility companies, large corporations and U.S. municipalities, which we believe mitigates risk.
- Materials / Equipment: Equipment may fail or break down resulting in lower than anticipated production or unplanned additional operating expenses.
- Mitigating Strategy: Equipment used in the Projects come with warranties (ranging from 2 to 25 years depending on the component) and guarantees from contractors (ranging from 2 to 5 years). Warranties and guarantees protect against failure when they are properly managed and pursued. Energea Global also accounts for degradation in our project models and sets aside a contingency reserve for unforeseen mechanical issues that may arise.
Page 23
As of the date of this Offering Circular, the Company does
not own any Projects and has made one (1) Loan (but the Company has not funded
any portion of such Loan and has not received any payments thereunder) and
therefore has no revenue.
As of the date of this Offering Circular, the Company has
issued one (1) Loan.
|
Borrower Name
|
Closing Date
|
Maximum Loan
Amount
|
Amount Lent as
of date hereof
|
Memo
|
|
Helios Colombia
S.A. E.S.P, and Energía de la Alta S.A. E.S.P
|
01/22/2025
|
$100,000,000*
|
$0.00
|
|
|
Total
|
|
|
$0.00
|
*The
Helios Loan is a revolving Loan and this amount represents the aggregate amount
of loans which may be made under the Helios Loan. The Company has the right but
not the obligation to fund amounts under the Helios Loan.
The following discussion of our
financial condition and results of operations should be read in conjunction
with our financial statements and the related notes thereto contained in this
Offering Circular. The following discussion contains forward-looking statements
that reflect our plans, estimates, and beliefs. Our actual results could differ
materially from those discussed in herein (see "Caution Regarding
Forward-Looking Statements" and "Risk Factors"). Unless otherwise
indicated, the latest results discussed below are as of December 31, 2024.
For financial statement purposes,
the Company accounts for investments in Projects under ASC 360. The Projects
are carried at cost and will be depreciated on a straight-line basis over the
estimated useful life of the related assets.
The Company evaluates for
impairment under ASC 360, utilizing the following required steps to identify,
recognize and measure the impairment of a long-lived asset to be held and used:
·
Indicators of impairment - Consider whether indicators of
impairment are present
· Test
for recoverability - If indicators are present, perform a recoverability test
by comparing the sum of the estimated undiscounted future cash flows
attributable to the long-lived asset in question to its carrying amount (as a
reminder, entities cannot record an impairment for a held and used asset unless
the asset first fails this recoverability test).
·
Measurement of an impairment - If the undiscounted cash flows
used in the test for recoverability are less than the carrying amount of the
long-lived asset, determine the fair value of the long-lived asset and
recognize an impairment loss if the carrying amount of the long-lived asset
exceeds its fair value.
Page 24
The Company follows ASC 606
guidelines for revenue recognition. To apply this principle, the standard
establishes five key steps:
· Step
1: Recognize the contract with the Customer/Borrower
· Step
2: Specify performance obligations
· Step
3: Establish transaction price
· Step
4: Allocate transaction price to performance obligations
· Step
5: Recognize revenue
We believe that LATAM presents a
compelling and evolving opportunity for investment in distributed solar energy.
Driven by rising electricity demand, high commercial energy costs, improving
regulatory frameworks, and strong solar resource availability, the region is
increasingly embracing decentralized clean energy solutions. Many LATAM
countries face grid reliability challenges, fuel price volatility, and a
dependence on large-scale hydro or fossil fuel imports-factors that we believe underscore
the need for a diversified and resilient power infrastructure. In this context,
distributed solar generation has emerged as a practical and cost-effective
solution, particularly for C&I consumers seeking energy savings,
reliability, and long-term price stability.
Over the past several years,
regulatory support for distributed energy resources has expanded across certain
LATAM countries, including net metering frameworks, streamlined interconnection
policies, and renewable energy targets. Financing activity has also increased,
with development banks, multilaterals, and climate-focused private capital
backing clean energy deployment at various scales. Technological advances in
solar and battery storage, coupled with declining equipment costs, have further
improved project economics, especially in middle-income countries with high
utility rates and exposure to climate-related grid instability.
While regulatory maturity and
credit quality vary across jurisdictions, a number of jurisdictions-such as
Colombia, Chile, Panama, and select Caribbean nations-appear to be demonstrating
clear momentum in enabling private-sector investment in distributed solar
assets. We believe that as policy clarity improves and offtake demand grows,
these jurisdictions are expected to continue expanding their distributed energy
footprints. The General Partner believes LATAM represents an attractive region
for disciplined, impact-aligned capital deployment, particularly through
structured investments in distributed solar assets serving large energy users
under long-term arrangements.
The
Company intends to make distributions monthly, to the extent the General
Partner, in its discretion, determines that cash flow is available for
distributions and in a manner consistent with the Authorizing Resolutions. Any
other distributions shall be made pursuant to the terms of the LP Agreement
which gives the General Partner broad discretion whether to make any
distributions. To date, the Company has not made a profit, although it has had
distributable cash flow. Below are the activities of the Company that generate
the cash flow which could be used to fund distributions:
- Net income received from the Projects;
- Interest payments received from the Borrowers;
- Interest payments received from Company Investments;
Page 25
- Net Proceeds from Capital Transactions;
- Originates from the sale or refinancing of Projects;
- Net proceeds are the gross proceeds of the capital transaction minus associated expenses, including debt repayment; and
- Liquidated Damages from Construction Agreements;
- Penalties paid by EPC Contractors when Projects are delivered behind schedule;
- Liquidated Damages are not booked as revenue but are considered distributable cash flow.
When the Company has
distributable cash flow and the General Partner determines to make a
distribution, here is an overview of how these distributions are allocated and
calculated:
Distributable cash flow, if any,
is distributed to the Preferred Equity Investors, on a pari passu basis,
and the General Partner in the following order of priority:
- First, the Preferred Return;
- Thereafter, any additional cash flow shall be distributed 80% to Preferred Equity Investors and the Carried Interest to the General Partner.
The General Partner will discount
each month of Estimated NOI (see "Price of Class A Investor Shares") by
the same discount rate until the cash flow results in an internal rate of
return ("IRR") of 7% ("Adjusted NOI"). The IRR is calculated
using the extended internal rate of return ("XIRR") function and is
based upon the price an Investor paid per Class A Investor Share. The resulting
Adjusted NOI is the monthly distribution that would need to be paid to
Investors for them to receive their Preferred Return. Since all months of
Estimated NOI are discounted evenly, the Adjusted NOI maintains the same
seasonality curve as the Estimated NOI. If the actual NOI for any month is less
than the Adjusted NOI, the Investors receive all the cash distributed that month
and the shortfall is carried forward so that Investors catch up on their
Preferred Return prior to any Carried Interest being paid. The IRR is
calculated based upon the price an Investor paid per Class A Investor Share,
and not on any revenue or profit achieved by the Company. To date, the Company
has not made a profit, although it has had distributable cash flow. To the
extent the Company has distributable cash flow but has no current or
accumulated earnings and profit, such distributions are considered a return of
capital for U.S. federal income tax purposes to the extent that the
distributions do not exceed the adjusted tax basis of the U.S. Holder's Class A
Investor Shares.
If the General Partner determines
that a distribution can be made with distributable cash flow, and the amount of
distributable cash flow is greater than the Adjusted NOI for the month (and the
Investors are therefore on track to receive their Preferred Return), the
General Partner will receive a Carried Interest. Any distributable cash flow
that is greater than the Adjusted NOI (plus any shortfall from previous months)
will be divided between the General Partner and the Preferred Equity Investors
where the General Partner will get 20% of the excess and Preferred Equity
Investors will get 80% of the excess.
Provided we have distributable
cash flow (see "Sources of Distributable Cash Flow"), we will authorize
and declare distributions based on the Projects' net income, interest paid on
Loans and interest earned on Company Investments during the preceding month
minus any amounts held back for reserves.
While we are under no obligation
to do so, our General Partner may declare other periodic distributions as
circumstances dictate. To date, the Company has not generated any distributable
cash flow.
Page 26
To the extent the Company has
distributable cash flow but has no current or accumulated earning and profit,
such distributions will be considered a return of capital for U.S. federal
income tax purposes to the extent that the distributions do not exceed the
adjusted tax basis of the U.S. Holder's Class A Investor Shares and reported to
Investors on a Form 1099-B. To the extent the Company makes distributions from
profits in the future, such distributions will be classified as dividends and
reported to Investors on a Form 1099-DIV.
Please note that in some cases,
Investors have cancelled their purchase of Class A Investor Shares after
distributions were made. In that case, the distribution allocated to that
Investor is returned to the Company and the bookkeeping is updated to reflect
the change in cash distributed. Thus, all figures below are subject to change.
The Company was organized under
the Delaware Limited Liability Company Act on August 7, 2023 and on June 17,
2025, the Company converted into a Delaware limited partnership pursuant to the
Delaware Revised Uniform Partnership Act. As of the date of this Offering
Circular, we do not own any Projects and have not made any disbursements under
the one (1) Loan we have made and as a result, we have no revenue.
We intend to use the proceeds of
this Offering to build, acquire, and operate Projects, issue Loans to Borrowers
and make Company Investments.
Apart from our efforts to raise
money from the sale of Class A Investor Shares in this Offering, we are not
aware of any trends or any demands, commitments, events, or uncertainties that
will result in or that are reasonably likely to result in the our liquidity
increasing or decreasing in any material way.
Our only Loan issued to date was to Helios
Colombia S.A. E.S.P, a Colombian utility company and Energía de la Alta S.A.
E.S.P to (collectively, "Helios" and such Loan the "Helios Loan").
The Helios Loan is a revolving loan which provides the Company with discretion
as to whether or not to advance funds to Helios. Any revolving loans will be
made in USD and Colombian pesos and the interest on the Colombia peso portion
of any revolving loan will be 18% per annum, and the interest on the USD
portion of any revolving loan will be 15% per annum. The Helios Loan is secured
and provides the Company with certain additional rights upon the occurrence and
continuance of a default by Helios. As of the date hereof, the Company has not
funded any portion of the Helios Loan. Under the Helios Loan, Helios has a
right to request a total amount of Advances (as such term is defined in the
Helios Loan) totaling $100 million USD. This right to request does not create
an obligation for the Company to fund the Advances. Further, due to the
revolving nature of the Helios Loan, $100 million will not be outstanding at
any one time, rather, as Advances are repaid and capital from the Offering is
raised, additional capital will become available to make new Advances. As a
result, the total amount of Advances the Company may make under the terms of
the Helios Loan amount to, in the aggregate, $100 million but do not require
the availability of that amount of capital in order for the Company to perform
its obligations under the Helios Loan.
The Company might borrow money to
invest in Projects, depending on the circumstances at the time. If the Company
needs to move quickly on a Project and has not yet raised enough capital
through the Offering, it might make up the shortfall through borrowing. The General
Partner will make this decision on an as-needed basis. As of the date of this
Offering Circular, neither the Company nor the Projects currently have any
loans.
Other than investments made by
the General Partner used to fund formation and operating expenses (such as in
connection with the execution and delivery of the agreements setting forth the
terms of the Helios Loan) , the Company has received no investments. The
Company has no capital commitments and the Company has no immediately available
sources of liquidity other than the proceeds of the Offering.
The compensation described in
this section was calculated using the accrual method in accordance with U.S.
GAAP.
Page 27
The Company itself has no
officers or employees. The individuals listed below are the Managing Partners,
Executive Officers, and Significant Employees of Energea Global, the General
Partner of the Company.
|
Name
|
Position with General Partner
|
Age
|
Term of Office
|
Approximate Hours Per Week If Not Full Time (1)
|
|
Executive Officers
|
|
|
|
|
|
Mike Silvestrini
|
Managing Partner
|
45
|
01/01/2017 - Present
|
Full Time
|
|
Chris Sattler
|
Managing Partner
|
45
|
01/01/2017 - Present
|
Full Time
|
|
Gray Reinhard
|
Managing Partner, CTO
|
40
|
01/01/2020 - Present
|
Full Time
|
|
Isabella Mendonça
|
Managing Partner, General
Counsel
|
33
|
10/02/2020 - Present
|
Full Time
|
|
|
|
|
|
|
|
Significant Employees
|
|
|
|
|
|
Arthur Issa
|
Financial Analyst
|
30
|
05/23/2018 - Present
|
Full Time
|
|
Paulo Vieira
|
Director of O&M
|
38
|
01/29/2024 - Present
|
Full Time
|
|
Francielle Assis
|
HR & HSEC Legal Coordinator
|
33
|
07/24/2023 - Present
|
Full Time
|
|
Marta Coelho
|
Controller, Global
|
52
|
12/07/2018 - Present
|
Full Time
|
|
Dave Rutty
|
Project Analyst
|
35
|
06/13/2022 - Present
|
Full Time
|
|
Julio Cezar dos
Santos de Morais
|
Electrical Engineer
|
35
|
09/25/2023 - Present
|
Full Time
|
|
Juan Carvajales
|
Loan Analyst
|
52
|
08/01/2023 - Present
|
Full Time
|
(1) The above
listed employees do not record specific hours to each Company managed by
Energea Global. Rather, the employees focus their full-time and energy to each
Project, portfolio, or process as needed. The General Partner cannot estimate
number of hours per week spent managing this or any particular Company as the
employees are salaried. The work required to manage the Company and other
companies managed by Energea Global changes from time to time depending on the
number and frequency of Projects resulting from the amount they raise in each
Offering. As the companies grow, dedicated staff are brought in to exclusively
manage a specific company. As of December 31, 2024, there are no staff members
exclusively dedicated to the Company and it is managed by the General Partner's
executive team and certain significant employees.
Marta Coelho, the General
Partner's Controller, is the sister-in-law of Mike Silvestrini, the Managing
Partner. There are no other family relationships among the executive officers
and significant employees of the General Partner.
Energea Global, the General
Partner of the Company, is majority owned by Mike Silvestrini, a resident of
Chester, Connecticut.
Mike Silvestrini
Mike is an accomplished
professional with over 15 years of experience in the solar energy industry. He
has played an executive key role in the development of over 500 solar projects
across the United States, Brazil, and Africa while being directly responsible
for nearly one billion of combined solar project finance.
Page 28
Since 2017, Mike has been the
Co-Founder & Managing Partner at Energea Global LLC. In his capacity as
Co-Founder & Managing Partner of the General Partner, Mike directs the
Investment Committee which determines the investment strategy for all funds
managed by the business. To date, Energea Global manages 3 funds formed to
acquire and operate solar power projects: the Company, Energea Portfolio 2 LP,
and Energea Portfolio 3 Africa LP. See "Other Solar Energy Funds" below
for the status each fund's offerings.
Since 2015, Mike has served as a
Board Member of the Big Life Foundation, an organization dedicated to
preserving over 1.6 million acres of wilderness in East Africa. Through
community partnerships and conservation initiatives, Big Life protects the region's
biodiversity and promotes sustainable practices.
From 2008 to 2017, Mike
co-founded and served as the CEO of Greenskies Renewable Energy LLC, a leading
provider of turnkey solar energy services. His expertise contributed to the
development, financing, design, construction, and maintenance of solar projects
across the United States. Notably, he was involved in solar installations on
Target Corporation stores and distribution centers, Wal-Marts and Sam's Clubs,
Amazon distribution centers, capped municipal landfills, and any schools and
universities.
Mike's track record in renewable
energy, his involvement in hundreds of solar projects worldwide, and his
dedication to environmental sustainability position him as a driving force in
managing investments in solar generating assets.
Chris Sattler
Chris is a seasoned energy
entrepreneur with a proven track record in building and scaling companies in
the renewable and retail energy sectors. Most recently, he served as Chief
Executive Officer of IVI Energia, a joint venture between Energea Global and
Brookfield Asset Management. Over his 18-month tenure, he led the company from
inception to a $280 million valuation before returning to his role at Energea
Global.
Earlier in his career, Chris
co-founded North American Power and served as Chief Operating Officer. Under
his leadership, the company expanded into more than 35 utility markets across
the U.S., serving over one million residential and small commercial customers.
In 2017, the company was acquired by Calpine Corporation with annual gross
sales exceeding $850 million.
Chris holds a Bachelor's degree
in Real Estate and Urban Economics from the University of Connecticut School of
Business and is an alumnus of Harvard Business School's Program for Leadership
Development. He currently resides in Rio de Janeiro.
Gray Reinhard
Gray is an experienced software
engineer specializing in business intelligence tools across multiple
industries. Early in Gray's career, he worked primarily in E-Commerce where he
built and supported sites for over 20 brands including several Fortune 500
companies. From there, Gray moved into renewable energy where he developed the
project management software for the country's largest commercial solar
installer, Greenskies. This custom platform managed everything from sales and
financing to the construction, maintenance, and performance monitoring of over
400 solar projects owned by the company.
Prior to joining Energea Global
in January 2020, Gray served as the CTO of Dwell Optimal Inc. which assists
businesses providing employees with travel accommodations.
Gray studied at Princeton
University.
Isabella Mendonça
Isabella is a corporate lawyer
with experience in cross-border M&A transactions and the drafting and
negotiation of highly complex contracts and corporate acts in different
sectors, such as energy, oil & gas and infrastructure. Isabella has previously
worked as an attorney for Deloitte and Mayer Brown in Brazil, where she was an
associate in the Energy group, working in regulatory, contractual and corporate
matters related to renewable energy project development.
Page 29
From 2016 until she joined
Energea Global, Isabella was an associate in the corporate and securities
practice at Mayer Brown in the Rio de Janeiro office.
Isabella studied law at Fundacão
Getulio Vargas, in Brazil and has a master's degree (LLM) from the University
of Chicago.
Arthur Issa
Arthur Issa was one of the first
employees at Energea Global, starting in May, 2018. Over the course of his time
with the business, Arthur has participated in the successful closing of more
than 100 MW of solar projects and developed the financial models that support
more than $300mm of AUM. Arthur is responsible for financial modeling of all
Projects and Loans at Energea Global. He also supports the company's corporate
financial planning through detailed financial modelling, reporting and cash
flow management. As an integral part of the team, he provides the tools
necessary for management to make investment decisions for Energea Global and
the Company. Arthur has a B.S. in Production Engineering from University
Candido Mendes in Rio de Janeiro, Brazil.
Paulo Vieira
Paulo is an accomplished
electrical engineer with a master's degree in Energy Resources Engineering and
over 5 years of leadership experience in the renewable energy sector. He
currently serves as the Global O&M Manager at Energea Global, where he
oversees operations and maintenance across a global portfolio of photovoltaic
assets spanning the USA, Brazil, and South Africa. Paulo is a member of Energea
Global's Investment Committee.
Specializing in solar energy
systems, Paulo has led the operations of more than 2.2 GW of solar projects.
His expertise includes O&M strategy development, performance optimization,
technical team leadership, and cost control initiatives aimed at improving
operational KPIs and financial performance. His professional journey includes
strategic roles at Recurrent Energy, Enel Green Power, COMERC Energia, Solarig,
and AKTOR SA, where he managed large-scale solar assets and drove operational
excellence through data-driven decision-making and cross-functional
coordination.
Paulo also brings a strong
academic foundation, with a postgraduate specialization in Photovoltaic Solar
Systems and international experience through Brazil's Scientific Mobility
Program in the U.S., where he studied at The University of Texas at El Paso. He
is deeply committed to advancing clean energy and delivering high-impact,
data-driven solutions in the solar power sector.
Francielle Assis
Francielle has over five years of
professional legal experience with a focus on labor and corporate law within
large-scale corporate environments. Since September 2024, she has served as HR
& HSEC Legal Coordinator at Energea Global. In that capacity, she ensures
compliance with labor laws and regulations for all corporate Human Resources
and oversees the company's Health, Safety, Environment and Community ("HSEC")
compliance and risk mitigation. Her responsibilities include managing labor
litigation, advising on employment law matters, and coordinating with
regulatory agencies and external legal counsel. She also attends site visits
for each Project to opine on the community and security risk prior to
investment and sits on Energea Global's Investment Committee.
Prior to joining Energea Global,
Francielle was a Senior Strategic Labor Attorney at CPFL Energia, one of
Brazil's largest energy companies. There, she led complex employment litigation
strategies and advised on collective labor issues. She also served as Labor
Attorney at CPFL, supporting operational and strategic labor matters across the
company's various business units.
Earlier in her career, Francielle
worked in both private law firms and governmental institutions, handling labor
and civil litigation. Her experience includes managing procedural strategies
and representing corporate clients in both individual and collective labor
disputes, demonstrating a high level of legal and operational competence.
Page 30
Marta Coelho
Since 2018, Marta Coelho has
served as the Controller at Energea Global, bringing with her a wealth of
experience and expertise in finance and accounting. As the global Controller,
Marta plays a crucial role in managing all financial aspects, including account
management, taxation, and audits, for Energea Global's diverse range of
operating entities and projects across Africa, Brazil, and the USA. Marta leads
a team of subordinate controllers and accountants at Energea Global and
coordinates with a bench of third-party accounting firms across our
jurisdictions of operation.
Dave Rutty
Dave is a highly experienced
solar professional with over 12 years of hands-on experience building,
maintaining, and managing solar projects. As a Project Analyst at Energea
Global, he plays a pivotal role in overseeing construction and maintenance
operations across all markets, ensuring projects are executed with precision,
safety, and technical excellence. Dave is responsible for preparing Investment
Committee memos across Energea Global's multidisciplinary team of experts to
ensure all investments meet the company's stringent compliance requirements.
From 2020 to 2022, Dave served as
a Managing Partner at SRES, a solar contracting company based in the
northeastern U.S. Prior to that, Dave was served as the Vice President of
Operations and Maintenance at Greenskies Renewable Energy LLC.
Julio
Cezar dos Santos de Morais
Julio is an experienced
electrical engineer specializing in photovoltaic systems, currently serving as
an Electrical Engineer at Energea Global since October 2023. He oversees
project design, field and factory inspections, and engineering analysis for distributed
generation systems. His technical expertise includes tools such as PVSyst,
AutoCAD, and protection design for medium-voltage applications.
Over the past nine years, Julio
has held engineering roles at CPFL Renováveis, Deode Energia, MEPEN Energia,
and others, where he managed solar projects exceeding 100 MW of combined solar
power generation capacity. Julio led technical teams and performed system
simulations and commissioning. He holds both bachelor's and master's degrees in
Electrical Engineering from the Federal University of Technology - Paraná
(UTFPR), with academic research published in the field of power electronics.
Juan Carvajales
Juan is a seasoned business
development professional with over 15 years of experience in the renewable
energy sector across U.S. and Latin American markets. Since August 2023, he has
worked as a Loan Analyst at Energea Global, where he supports investment
strategies and portfolio architecture, leveraging his background in project
development, financing, and cross-border renewable energy transactions to
identify private credit opportunities.
Before joining Energea Global,
Juan held key leadership roles including Director of Business Development at
GeneraSol (2007-2023) and Board Member at SUA Power Company (2021-2023), where
he focused on structuring and executing solar PV and off-grid energy projects.
He has also led utility-scale solar development at Grupo BAZ and has a
foundational background in project and operations management. Juan holds a BBA
from Politécnico Costa Atlántica and additional certifications in solar energy
and environmental science.
Within the last five years, no
Director, Executive Officer, or Significant Employee of the Company has been
convicted of, or pleaded guilty or no contest to, any criminal matter,
excluding traffic violations and other minor offenses.
Within the last five years, no
Director, Executive Officer, or Significant Employee of the Company, no
partnership of which an Executive Officer or Significant Employee was a general
partner, and no corporation or other business association of which an Executive
Officer or Significant Employee was an executive officer, has been a debtor in
bankruptcy or any similar proceedings.
Page 31
Energea Global, the General
Partner of the Company, is also the general partner of three other funds formed
to acquire and operate solar power projects, each of which is conducting an
offering under Regulation A:
·
Energea Portfolio 2 LP ("Portfolio 2"), which was formed
to acquire and operate projects located in Brazil with residential and small
business customers.
·
Energea Portfolio 3 Africa LP ("Portfolio 3"), which was
formed to acquire and operate projects located in Africa.
·
Energea Portfolio 4 USA LP ("Portfolio 4"), which was
formed to acquire and operate projects located in the United States.
Each of Portfolio 2, Portfolio 3
and Portfolio 4 is conducting an offering under Regulation A. The current
status of their current and prior offerings, as of December 31, 2024 is
below:
|
|
Energea
Portfolio 2 LP
|
Energea
Portfolio 3 Africa LP
|
Energea
Portfolio 4 USA LP
|
|
Date of Initial Qualification
|
08/13/2020
|
08/2/2021
|
07/01/2021
|
|
Date of Current Qualification
|
06/06/2024
|
06/17/2024
|
06/26/24
|
|
Offering Amount Raised Through 12/31/24
|
$22,061,519.49
|
$5,152,094.63
|
$4,753,234.65
|
|
Solar Projects Owned
|
Thirteen
|
Sixteen
|
Four
|
|
Current Maximum Offering Amount
|
$50,000,000
|
$50,000,000
|
$50,000,000
|
Our General Partner is compensated when the Company pays
the fees described in the table below ("Fees"):
|
Type of Fee
|
Timing of Fee
|
Description
|
|
Reimbursement of Marketing
Expenses
|
Ongoing
|
The
Company must reimburse the General Partner for expenses the General Partner
incurs while promoting the Company to potential investors. The maximum
reimbursable amount is 5% of the total amount raised. Types of costs that
will be reimbursed by the Company to the General Partner for marketing
expenses include digital and conventional advertisements, marketing personnel
and third-party costs, promotional events and any other cost associated with
communicating this Offering to the general public.
|
|
Management Fees
|
Ongoing
|
The General Partner will charge
the Company a monthly management fee equal to 0.167% of the aggregate capital
that has been invested into the Company.
|
|
Carried Interest
|
When the distributions exceed
the Preferred Return
|
The
General Partner will receive 20% of all distributed cash flow above the
monthly amount necessary for Preferred Equity Investors to receive their
Preferred Return. For more detail, see "Carried Interest" below
|
|
When Projects and Loans are originated
|
The General Partner might
originate and develop Projects and Loans that are acquired by the Company. If
so, the General Partner shall be entitled to compensation that is no greater
than 5.0% of the Project's cost or the Loan's outstanding balance.
|
|
|
O&M and Energy Sales
Services ("Ancillary Services")
|
Ongoing as services are rendered
according to contract
|
The
Company does not currently pay the General Partner for any Ancillary
Services.
|
|
Interest on Loans
|
Whenever due and payable
|
The General Partner might lend
to the Company to fund the acquisition or investment in Projects and Loans or
for other purposes. Such a loan will bear interest at market rates. The
amount of interest will depend on the amount and term of any such loans.
|
Page 32
While the General Partner is not
entitled to any compensation other than the Fees as described above, it may
defer some or all of Fees at any time based on the General Partner's assessment
of the cash flow at the Company. Some Fees may be deferred indefinitely at the
discretion of the General Partner. To date, the General Partner has provided
services without charging the full amount owed by the Company. As the Company
and its cash flow stabilize, the General Partner may charge for deferred Fees
("Deferred Fees") - see "Fees Paid to General Partner" for more
information.
As the Company grows, markets,
exceeds Preferred Returns and requires the General Partner for Ancillary
Services, fees are accrued to the General Partner, some of which are deferred,
as described above. Below is a table which calculates the total amounts paid to
the General Partner from all possible fees, which have been paid as of December
31, 2024:
|
Fee Type
|
Fees Paid to
General Partner in 2024
|
Fees Paid Since
Inception
|
|
Reimbursement of Marketing Expenses
|
-
|
-
|
|
Asset Management Fee
|
-
|
-
|
|
Carried Interest
|
-
|
-
|
|
Origination Fees
|
-
|
-
|
|
Ancillary Services
|
-
|
-
|
|
Interest on Loans
|
-
|
-
|
|
TOTAL
|
-
|
-
|
The General Partner and its
affiliates might purchase Class A Investor Shares. If so, they will be entitled
to the same distributions as other Preferred Equity Investors. If such
investment is made to facilitate the Company's acquisition of or investment in
Projects before there are sufficient offering proceeds, the General Partner
will be entitled to redeem its Class A Investor Shares from additional Offering
proceeds as they are raised.
As of the date hereof, the individuals
named below own Class A Investor Shares and such individuals, as well as other
employees of the General Partner may own Class A Investor Shares that they
purchased privately through the Platform in the same manner as any Investor.
The following table sets forth the approximate beneficial
ownership of our Class A Investor Shares as of the date hereof, for each person
or group that holds more than 10.0% of our Class A Investor Shares, and for
each director and executive officer of our General Partner and for the
directors and executive officers of our General Partner as a group.
Page 33
|
Name of Beneficial Owner (1)(2)
|
Number of
Shares Beneficially Owned
|
Amount and
Nature of Beneficial Ownership Acquirable
|
Percent of All
Shares
|
|
Energea Global LLC
|
169,150
|
N/A
|
100%
|
|
Michael Silvestrini
|
69,934(3)
|
N/A
|
41.33%
|
|
Christopher Sattler
|
54,553(3)
|
N/A
|
32.24%
|
|
All directors and executive officers of our General
Partner as a group (2 persons)
|
0
|
N/A
|
73.57%
|
|
-
|
|
-
|
(1) Under SEC
rules, a person is deemed to be a "beneficial owner" of a security if that
person has or shares "voting power," which includes the power to dispose of or
to direct the disposition of such security. A person also is deemed to be a
beneficial owner of any securities which that person has a right to acquire
within 60 days. Under these rules, more than one person may be deemed to be a
beneficial owner of the same securities and a person may be deemed to be a
beneficial owner of securities as to which he or she has no economic or
pecuniary interest.
(2) Each listed
beneficial owner, person or entity has an address in care of our principal
executive offices at 52 Main Street, Chester, CT 06412.
(3) Includes shares
beneficially owned by Energea Global LLC, under the control of its Class A
Shareholders. Notably, Michael Silvestrini and Chris Sattler, as the largest
principal shareholders, hold 41.33% and 32.24% of the shares of Energea Global
LLC, respectively. (As of December 31, 2024)
The Company might enter into
other transactions with related parties. If so, any compensation paid by the
Company to the related party shall be (i) fair to the Company, and (ii)
consistent with the compensation that would be paid to an unrelated party.
By "related party" we mean:
·
The General Partner or a subsidiary of the General Partner;
·
Any director, executive officer, or significant employee of the
Company or the General Partner;
·
Any person who has been nominated as a director of the Company or
the General Partner;
·
Any person who owns more than 10% of the voting power of the
Company or the General Partner; and
·
An immediate family member of any of the foregoing.
As of the date of this Offering
Circular, the Company has entered into transactions with related parties in one
circumstance:
·
Credit Advance: The Company entered into several credit
advances from the General Partner to accelerate the availability of capital
needed to make certain small payments. These amounts are recorded as
do-to/do-from transactions and no interest is charged to the Company for these
advances.
The Company has not, and does not
intend to, enter into any related party transaction with the General Partner or
its subsidiaries or any other related party other than those transactions
described above in "Compensation of General Partner". As discussed
above, the Company may pay or reimburse the General Partner for marketing
expenses, management fees, Carried Interest, Ancillary Services and interest on
loans. There are no other expenses, nor will there be other expenses in the
future, where the Company pays a related party other than the Fees.
Page 34
The Company is offering up to
$50,000,000 of Class A Investor Shares. All of the rights and obligations
associated with the Class A Investor Shares are set forth in:
·
The LP Agreement, which can be found here;
and
·
The Authorizing Resolution, which can be found here.
The fixed price of Class
A Investor Shares was determined by calculating the Net Asset Value ("NAV")
of the Company and dividing the NAV by the total number of outstanding shares.
The NAV is calculated as the Net Present Value ("NPV") of the Estimated
Net Operating Income ("Estimated NOI") of the Company.
The Estimated NOI calculation
begins with an estimation of cash flow. Cash flow comes from distributions from
Projects, interest payments from Loans and interest earned from Company
Investments. To estimate Project cash flow, we estimate monthly energy produced
by each Project using predictive software called PVsyst. PVsyst is a vital tool
in the solar industry for designing and simulating the performance of
photovoltaic systems. Its comprehensive features enable precise predictions of
solar power generation ("kWh"), considering a wide range of variables
and site-specific conditions. To estimate monthly revenue for each Project, the
energy rate described in the Power Purchase Agreement ("Energy Rate") is
multiplied by kWh throughout the term of the Power Purchase Agreement. We then
deduct the expected Project Operating Expenses to determine the cash available
for distribution to the Company from the Projects (see "Our Operating Costs
and Expenses - Project operating expenses"). In addition, to the cash
available for distribution from the Projects, in determining the Estimated NOI,
we add any anticipated interest payments from Loans and Company Investments.
We then deduct all of the
expected operating expenses at the Company level (see "Our Operating Costs
and Expenses - Company Operating Expenses") from the revenue. These
expenses are fairly easy to estimate as they are either consistent and
predictable (like a bank fee) or fixed by contract (like a Project Maintenance
Contract). By subtracting the estimated operating costs and expenses from the estimated
revenue, we establish a monthly Estimated NOI. We then use an XIRR calculation
to compute the NPV of that Estimated NOI using the Company's IRR as the
discount rate in the NPV equation. For example, if the Estimated NOI would
result in a 12% IRR, we use 12% as the discount rate when calculating the NPV
of the Estimated NOI.
Therefore, the NPV of the
Estimated NOI using the IRR as the discount rate establishes the NPV of the
Company. When we divided the NPV of the Company by the number of outstanding
Class A Investor Shares, we arrive at a price per share.
Investors will have no right to
vote or otherwise participate in the management of the Company. Instead, the
Company will be managed by the General Partner exclusively.
The
Company is governed by a Limited Partnership Agreement dated June 17, 2025 (the
"LP Agreement"). A copy of the LP Agreement can be found here.
The Class A Investor Shares being offered were created by the General Partner
under an Authorizing Resolution pursuant to Section 3.01 of the LP Agreement. A
copy of the Authorizing Resolution can be found here.
The LP Agreement establishes
Energea Global LLC, a Delaware limited liability company, as the General
Partner.
Page 35
The following summarizes some of
the key provisions of the LP Agreement and the Authorizing Resolution. This
summary is qualified in its entirety by the LP Agreement itself, a copy of
which can be found here,
and by the Authorizing Resolution itself, a copy of which can be found here.
The Company was formed in
Delaware on August 7, 2023, pursuant to the Delaware Limited Liability Company
Act. On June 17, 2025, the Company converted from a Delaware limited liability
company to a Delaware limited partnership, pursuant to the Delaware Revised
Uniform Partnership Act (the "Delaware LP Act").
Under the LP
Agreement, ownership interests in the Company are referred to as "Share",
while the owners, are referred to as "Limited Partners".
The General Partner adopted the
Authorizing Resolution to create the "Class A Investor Shares". Any
Investor who buys Class A Investor Shares in the Offering will be a "Limited
Partner" under the LP Agreement.
The interests in the Company are
denominated by 2,501,000,000 "Shares". 2,000,000,000 of these Shares are
designated as either Class B Shares, Class C Shares, Class D Shares or Class I
Shares, with the exact amount of each such class being determined by the
General Partner. In accordance with the Partnership Agreement, the General
Partner may reclassify any unsold existing class of Investor Shares into one or
more classes by adopting one or more authorizing resolutions.
The Class A Investor Shares will,
for the most part, be owned by Investors and are the subject of this Offering. The
General Partner currently owns [169,150] Class A Investor Shares. By adopting
other authorizing resolutions, the General Partner may create, offer, and sell
other classes of Investor Shares in the future, which could have rights
superior to the rights of the Class A Investor Shares.
The General Partner has complete
discretion over all aspects of the business conducted by the Company. For
example, the General Partner may (i) create classes of Shares with such terms
and conditions as the General Partner may determine in its sole discretion;
(ii) issue Shares to any person for such consideration as the General Partner
maybe determine in its sole discretion, and admit such persons to the Company
as Limited Partners; (iii) engage the services of third parties to perform
services on behalf of the Company; (iv) enter into one or more joint ventures;
(v) purchase, lease, sell, or otherwise dispose of real estate and other assets
including Projects or Loans, in the ordinary course of business or otherwise;
(vi) enter into leases and any other contracts of any kind; (vii) incur
indebtedness on behalf of the Company, whether to banks or other lenders;
(viii) determine the amount of the Company's distributable cash (as described
herein), and, subject to any authorizing resolutions, the timing and amount of
distributions to Limited Partners; (ix) determine the information to be
provided to the Limited Partners; (x) grant mortgages, liens, and other
encumbrances on the Company's assets; (xi) make all elections under the Code
and the provisions of State and local tax laws; (xiii) file a petition in
bankruptcy; (xiv) discontinue the business of the Company; and (xv) dissolve
the Company.
Investors who purchase Class A
Investor Shares will not have any right to vote on any issue other than certain
amendments to the LP Agreement, or to remove the General Partner.
The General Partner can be
removed for "cause" under a procedure set forth in Section 5.06 of the LP
Agreement.
The term "cause" includes:
·
An uncured breach of the LP Agreement by the General Partner; or
·
The bankruptcy of the General Partner; or
Page 36
·
Certain misconduct on the part of the General Partner, if the
individual responsible for the misconduct is not terminated.
A vote to remove the General
Partner for cause must be approved by Limited Partners owning at least seventy-five
percent (75%) of the issued and outstanding Class A Investor Shares and the Reg
D Shares, voting together as a single class (the Class A Investor Shares and
the Reg D Shares being collectively referred to herein as the "Investor
Shares"). Whether "cause" exists would then be decided in arbitration
proceedings conducted under the rules of the American Arbitration Association,
rather than in a court proceeding.
These provisions are binding on
every person who acquires Class A Investor Shares, including those who acquire
Class A Investor Shares from a third party, i.e., not from the Company.
The LP
Agreement protects the General Partner and its employees and affiliates from
lawsuits brought by Investors. For example, it provides that the General
Partner will not be liable to the Company for mistakes, errors in judgment, or
other acts or omissions (failures to act) as long as the act or omission was
not the result of the General Partner's fraud or willful misconduct under the
LP Agreement. This limitation on the liability of the General Partner and other
parties is referred to as "exculpation."
The LP Agreement also requires
the Company to indemnify (reimburse) the General Partner, its affiliates, and
certain other parties from losses, liabilities, and expenses they incur in
performing their duties. For example, if a third party sues the General Partner
on a matter related to the Company's business, the Company would be required to
indemnify the General Partner for any losses or expenses it incurs in
connection with the lawsuit, including attorneys' fees. However, if it is
judicially determined that such General Partner is not entitled to be
exculpated under the standard described in the preceding paragraph by the LP
Agreement, the General Partner shall promptly reimburse the Company for any
reimbursed or advanced expenses.
Notwithstanding the foregoing, no
exculpation or indemnification is permitted to the extent such exculpation or
indemnification would be inconsistent with the requirements of federal or state
securities laws or other applicable law.
The detailed rules for
exculpation and indemnification are set forth in section 6.02 of the LP
Agreement.
Once an Investor pays for his,
her, or its Class A Investor Shares, the Investor will have no obligation to
make further contributions to the Company (except for the return of
distributions under certain circumstances as required by Sections 17-607 and 17-804
of the Delaware LP Act, as described in more detail under "Liability To Make
Additional Contributions" below.
No Investor will be personally
liable for any of the debts or obligations of the Company.
The manner in which the Company
will distribute its available cash is described in "Securities Being Offered
- Calculating Distributions".
In general, Investors may freely
transfer their Class A Investor Shares. However, if an Investor wants to sell
Class A Investor Shares, the Investor may only offer the Class A Investor
Shares to the General Partner via the Platform. The General Partner generally
has a first right of refusal to purchase Class A Investor Shares pursuant to
Article 8 of the LP Agreement. See "Risk Factors-No Market for the Class A
Investor Shares; Limits on Transferability."
Page 37
If an Investor who is a human
being (as opposed to an Investor that is a legal entity) should die or become
incapacitated, the Investor or his, her or its successors will continue to own
the Investor's Class A Investor Shares.
The Company will pay certain
management fees and other fees to the General Partner, as summarized in "Compensation
of General Partner".
The General Partner may require an Investor to sell his,
her, or its Class A Investor Shares back to the Company:
·
If the Investor is an entity governed by the Employee Retirement
Income Security Act of 1974, Code section 4975, or any similar Federal, State,
or local law, and the General Partner determines that all or any portion of the
assets of the Company would, in the absence of the redemption, more likely than
not be treated as "plan assets" or otherwise become subject to such laws.
·
If the General Partner determines that the Investor has engaged
in certain misconduct described in the LP Agreement.
If an Investor's Class A Investor
Shares are purchased by the Company as provided above, the price will be equal
to 90% of the then-current share price of such Class A Investor Shares as
published on the Platform.
The purchase price will be paid
by wire transfer or other immediately available funds.
If the General Partner wants to
sell the business conducted by the Company, it may affect the transaction as a
sale of the Project owned by the Company or as a sale of all the Shares in the
Company. In the latter case, Investors will be required to sell their Class A
Investor Shares as directed by the General Partner, receiving the same amount
they would have received had the transaction been structured as a sale of
assets.
All documents, including all
tax-related documents, will be transmitted by the Company to Investors via
email and/or through the Platform.
The General Partner may amend the
LP Agreement unilaterally (that is, without the consent of anyone else) for a
variety of purposes, including to:
·
Cure ambiguities or inconsistencies in the LP Agreement;
·
Add to its own obligations or responsibilities;
·
Conform to this Offering Circular;
·
Comply with any law;
Page 38
·
Ensure that the Company isn't treated as an "investment company"
within the meaning of the Investment Company Act of 1940;
·
Do anything else that could not reasonably be expected to have a
material adverse effect on Investors.
An amendment that has, or could
reasonably be expected to have, a material adverse effect on Investors,
requires the consent of the General Partner and Investors holding a majority of
the Class A Investor Shares.
An amendment that would require
an Investor to make additional capital contributions, delete or modify any
amendments listed in Section 11.03 of the LP Agreement or impose personal
liability on an Investor requires the consent of the General Partner and each
affected Investor.
Within a reasonable period after
the end of each fiscal year of the Company, the General Partner will provide
Investors with (i) a statement showing in reasonable detail the computation of
the amount distributed, and the manner in which it was distributed (ii) a
balance sheet of the Company, (iii) a statement of income and expenses, and
(iv) such additional information as may be required by law. The financial
statements of the Company need not be audited by an independent certified
public accounting firm unless the General Partner so elects or the law so
requires. While the Company currently maintains audited financial statements,
under the LP Agreement, the Company is not required to maintain audited
financial statements unless the General Partner so elects or the law so
requires.
As a "tier 2" issuer under
Regulation A, the Company will also be required to provide investors with
additional information on an ongoing basis, including annual audited financial
statements, annual reports filed on SEC Form 1-K, semiannual reports filed on
SEC Form 1-SA, special financial reports filed on SEC Form 1-K, and current
reports on SEC Form 1-U. If, however, our Class A Investor Shares are held "of
record" by fewer than 300 persons, these reporting obligations could be
terminated.
A Member's right to see
additional information or inspect the books and records of the Company is
limited by the LP Agreement.
Distributions made in liquidation
of the Company will be made in the manner described "Calculating
Distributions", depending on whether the distributions consist of ordinary
operating cash flow or net capital proceeds.
The holders of the Class A
Investor Shares will not have preemptive rights. That means that if the Company
decides to issue securities in the future, the holders of the Class A Investor
Shares will not have any special right to buy those securities.
Once an Investor pays for his,
her, or its Class A Investor Shares, the Investor will have no obligation to
make further contributions to the Company (except for the return of
distributions under certain circumstances as required by Sections 17-607 and 17-804
of the Delaware LP Act).
Under Section 17-607 of the
Delaware LP Act, a limited partnership may not make a distribution to a partner
if, after the distribution, all liabilities of the limited partnership, other
than liabilities to partners on account of their partnership interests and
liabilities for which the recourse of creditors is limited to specific property
of the limited partnership, would exceed the fair value of the assets of the
limited partnership. The Delaware LP Act provides that a partner who receives a
distribution and knew at the time of the distribution that the distribution was
in violation of Section 17-607 of the Delaware LP Act shall be liable to the
limited partnership for the amount of the distribution for three years.
Page 39
Under Section 17-804 of the
Delaware LP Act, a limited partnership is required to distribute its assets:
(i) first to creditors, to the extent otherwise permitted by law, in
satisfaction of the limited partnership's liabilities other than liabilities
for which payment has been made and distributions to partners and former
partners; (ii) unless otherwise provided in its limited partnership agreement,
to partners and former partners in satisfaction of liability for distributions
under the Delaware LP Act; and (iii) unless otherwise provided in its limited
partnership agreement, to partners first for the return of their contributions
and second respecting their partnership interests, in the portions in which
they share in distributions. The Delaware LP Act provides that a member who
receives a distribution and knew at the time of the distribution that the
distribution was in violation of Section 17-804 of the Delaware LP Act shall be
liable to the limited partnership for the amount of the distribution for three years.
In some situations, the General
Partner might be required by law to withhold taxes and/or other amounts from
distributions made to Investors. The amount we withhold will still be treated
as part of the distribution. For example, if we distribute $100 to an Investor
and are required to withhold $10 in taxes, for our purposes the Investor will
be treated as having received a distribution of $100 even though only $90 was
deposited in the Investor's bank account.
At this time, all Investors are
U.S. persons for all federal tax purposes. To the extent at any point in the
future any Investors may be non U.S. persons, the distributions to Investors
may subject to additional tax withholding and other reporting requirements.
The Company can only distribute
as much cash flow as the Company has available for distributions (see "Distributions").
There is no guarantee that the Projects will generate enough cash flow, after
paying expenses, to distribute enough to pay a positive return to Investors or
even to return all their invested capital.
Investors should note that the General
Partner may, in its sole discretion, amend, suspend,
or terminate the Redemption Plan at any time without prior notice for any
reason, and the General Partner reserves the
right to reject any Redemption Request at any time for any reason.
Our Class A Investor Shares are
currently not listed on a national securities exchange or included for
quotation on a national securities market, and currently there is no intention
to list our Class A Investor Shares. While Investors should view an investment
in the Company as long-term, we are adopting a redemption plan ("Redemption
Plan") whereby an Investor has the opportunity to obtain liquidity.
At any time after sixty (60) days
following the purchase of Class A Investor Shares, an Investor may request
redemption of their Class A Investor Shares in accordance with the Company's
Redemption Plan as set forth herein.
In order to submit a redemption
request ("Redemption Request") Investors must (1) submit a time-stamped
request via the Platform, (2) have no more than one outstanding request at any
given time, and (3) request that the Company redeem no more than $50,000 worth
of Class A Investor Shares per request. In addition, the Redemption Plan is
subject to certain liquidity limitations, which may fluctuate depending on the
liquidity of the Company. We reserve the right to reject any Redemption Request
at any time to protect our operations and our non-redeemed Investors, to
prevent an undue burden on our liquidity, or for any other reason, including,
what we deem to be a pattern of excessive, abusive or short-term trading.
As calculated below, the
redemption price ("Redemption Price") may be reduced by a discount based
on the time of the Redemption Request, rounded down to the nearest cent. The
Redemption Price will be equal to (i) the current price of the Class A Investor
Shares in effect at the time the Redemption Request is made, reduced by (ii)
the aggregate sum of distributions, if any, with record dates during the period
between the Redemption Request date and the redemption date. The current price
of the Class A Investor Shares is published on the Platform, and Investors will
be informed of the estimated Redemption Price at the time a Redemption Request
is submitted, subject to the adjustment for distributions described above.
Page 40
Based on the time when an
Investor submits a Redemption Request, the Redemption Prices are set forth
below:
|
Holding Period from Date
of Settlement
|
Redemption Price (as
percentage of per share redemption price)(1)
|
|
|
Settlement date to 60 days
|
No Redemptions
|
|
|
60 days to 3 years
|
95.0
|
% (2)
|
|
More than 3 years
|
100.0
|
% (3)
|
(1) The
Redemption Price will be the per share price for our Class A Investor
Shares in effect as of the time the Redemption Request is made (i) reduced by
any distributions, if any, with record dates during the period between the
Redemption Request date and the redemption date and (ii) rounded down to the
nearest $0.01.
(2) For Class A
Investor Shares held between 60 days and three (3) years, the Redemption Price
includes a fixed 5.0% discount based on the per share price for our Class A
Investor Shares in effect at the time of the Redemption Request.
(3) There is
no discount to redemptions of Class A Investor Shares held at least three
(3) years.
Investors may withdraw
their Redemption Request at any time before the redemption is paid. If we agree
to honor a Redemption Request, such Redemption Request will be paid within 90
days.
In light of the SEC's current
guidance on redemption plans, we generally intend to limit redemptions in any
calendar quarter to Class A Investor Shares whose aggregate value is 5.00% of
the NAV of all of our outstanding Class A Investor Shares on the last business
day of the preceding quarter, with excess capacity carried over to later
calendar quarters in that calendar year, up to a maximum of 20.00% of the NAV
of all of our Class A Investor Shares outstanding during any calendar year.
Notwithstanding the foregoing, we are not obligated to redeem Class A Investor
Shares under the Redemption Plan.
We cannot guarantee that the
funds, if any, set aside for the Redemption Plan will be sufficient to
accommodate all Redemption Requests. In the event our General Partner
determines, in its sole discretion, that we do not have sufficient funds
available to redeem all of the Class A Investor Shares for which Redemption
Requests have been submitted, such pending Redemption Requests will be honored
on a first in first out basis, if at all. In the event that not all Redemption
Requests are being honored in a given quarter, due to reaching the 5.00%
quarterly limit or otherwise, the Redemption Requests not fully honored will
carry over to the first business day of the next quarter and Investors will not
need to submit a new Redemption Request the following quarter. Investors will
be notified within 10 days of submitting a Redemption Request whether their
request for Redemption has been accepted or denied.
We intend to limit Investors to
one (1) Redemption Request outstanding at any given time, meaning that, if an
Investor desires to request more or less Class A Investor Shares be redeemed,
such Investor must first withdraw the first Redemption Request. For Investors
who hold Class A Investor Shares with more than one record date, Redemption
Requests will be applied to such Class A Investor Shares in the order in which
they settled, on a first in first out basis - meaning, those Class A Investor
Shares that have been continuously held for the longest amount of time will be
redeemed first. In addition, we intend to limit Redemption Requests to $50,000
worth of Class A Investor Shares per Redemption Request.
In addition, our General Partner
may, in its sole discretion, amend, suspend, or terminate the Redemption Plan
at any time without prior notice, including to protect our operations and our
non-redeemed Investors, to prevent an undue burden on our liquidity, following
any material decrease in our NAV, or for any other reason. In the event that we
suspend our Redemption Plan, we expect that we will reject any outstanding
Redemption Requests and do not intend to accept any new Redemption Requests. In
the event that we amend, suspend or terminate our Redemption Plan, we will file
an Offering Circular supplement and/or Form 1-U, as appropriate, and post such
information on the Platform to disclose such action. Therefore, you may not
have the opportunity to make a Redemption Request prior to any potential
termination of our Redemption Plan.
Investors will own the majority
of the Class A Investor Shares while the General Partner will own all the
Common Shares. The General Partner currently owns [169,150] Class A Investor
Shares as described herein. The principal rights associated with the Common
Shares are as follows:
Page 41
·
Distributions: As the holder of the Common Shares, the
General Partner will be entitled to the distributions of the Carried Interest.
·
Voting Rights: The Common Shares will have no voting
rights per se. However, the General Partner, in its capacity as the
general partner of the Company, will control the Company.
·
Obligation to Contribute Capital: Holders of the Common
Shares will have no obligation to contribute capital to the Company.
·
Redemptions: Holders of the Common Shares will have no
right to have Common Shares redeemed.
To purchase Class A Investor Shares, you are required to
sign an investment agreement, the forms of which are attached hereto (See "How
to Invest"). Each of the Investment Agreements enable Investors to make an
initial purchase of Class A Investor Shares (to the extent the Investor is
making a one-time purchase of the Class A Investor Shares). The Auto-Invest
Agreement and the Auto-Reinvestment Agreement permit an Investor to make a
one-time purchase of Class A Investor Shares and/or enable an Investor to elect
to make additional purchases of Class A Investor Shares, pursuant to the terms
of this Offering, on a periodic basis, by either (i) establishing with the
Company, a plan for the Investor to automatically invest in the Offering on a
periodic basis, subject to the terms of an Auto-Invest Agreement signed by the
Investor and the Company or (ii) to reinvest the distributions the Investor
receives from their Class A Investor Shares into the purchase of additional
Class A Investor Shares, subject to the terms and conditions of the an
Auto-Reinvestment Agreement, signed by the Investor and the Company.
The Investment Agreements will limit your rights in several
important ways if you believe you have claims against us arising from the
purchase of your Class A Investor Shares:
Any claims arising from your purchase of Class A Investor
Shares must be brought in the state or federal courts located in Wilmington,
Delaware, which might not be convenient to you.
You would not be entitled to recover any lost profits or
special, consequential, or punitive damages. However, that limitation does not
apply to claims arising under federal securities laws.
To the extent an Investor elects to automatically invest in
the Offering on a periodic basis, such Investor will be subject to the terms
and conditions of an Auto-Invest Agreement, which include, but are not limited
to the following:
- Upon signing the Auto-Invest Agreement, the Investor will indicate the number of additional Class A Investor Shares ("Additional Shares") the Investor intends to purchase and the intervals at which the Investor will make such purchases, following their initial purchase of Class A Investor Shares, on the Investor Information Sheet attached thereto.
- Price: The price of Additional Shares to be purchased by Investor shall be the same price at which Class A Investor Shares are then being offered in the Offering.
- Opt Out: The Investor will have the ability cancel or pause the Auto-Investments from the Purchaser's online Energea account settings (https://www.energea.com/users/auto-invest), or by giving the Company at least (30) calendar days' notice (via email).
- Termination: In accordance with Regulation A, the Investor will no longer be permitted to make Auto-Investments after the Offering is terminated.
- Limitation: The law limits how much an investor who is not "accredited" within the meaning of 17 CFR §230.501(a) may invest in the Offering. As such, the Investor's investments could be subject to a cutback, and the Auto-Invest Agreement subject to termination, in the event the Company meets or exceeds the maximum amount of the Offering or, in the event the investor is non-accredited, the Investor's cumulative amount of investments with the Company meets or exceeds the maximum investment amounts permitted by a non-accredited investor under Regulation A. Under either circumstance, the Investor would be redeemed for those Class A Investor Shares subject to the cutback.
Page 42
- No Transfer of Shares: The Investor will be prohibited from transferring the Shares purchased pursuant to the terms of the Auto-Invest Agreement without complying with the terms of the Partnership Agreement, subject to rights of first refusal in favor of the Company and securities laws limitations.
- Forum Selection: The Auto-Invest Agreement is governed by the internal laws of Delaware. Pursuant to the terms of the Auto-Invest Agreement, if the Investor is not otherwise subject to service of process in Delaware, the Investor agrees to appoint and maintain an agent in Delaware to accept service, and to notify the Company of the name and address of such agent.
- Potential for Cutback of Additional Shares Purchased: As a Tier 2 offering under Rule 251(a), the Investor's Class A Investor Shares could be subject to a cutback, and the agreement subject to termination, in the event the Company meets or exceeds the maximum amount of the Offering or, in the event the investor is non-accredited, the Investor's cumulative amount of investments with the Company meets or exceeds the maximum investment amounts permitted by a non-accredited investor under Regulation A. Under either circumstance, the investor would be redeemed for those Class A Investor Shares subject to the cutback.
To the extent an Investor elects to reinvest the
distributions the Investor receives from their Class A Investor Shares into the
purchase of additional Class A Investor Shares, such Investor will be subject
to the terms and conditions of an Auto-Invest Agreement, which include, but are
not limited to the following:
- By signing the Auto-Reinvestment Agreement, the investor will agree to use a portion of the amount of the distributions received from the Company through the Investor's ownership of Class A Investor Shares to purchase Additional Shares.
- Price: The price of Additional Shares to be purchased by Investor shall be the same price at which Class A Investor Shares are then being offered in the Offering.
- Opt Out: The Investor will have the ability cancel or pause the Auto-Investments from the Purchaser's online Energea account settings (https://www.energea.com/users/auto-invest), or by giving the Company at least (30) calendar days' notice (via email).
- Termination: In accordance with Regulation A, the Investor will no longer be permitted to make Auto-Reinvestments after the Offering is terminated.
- Limitation: The law limits how much an investor who is not "accredited" within the meaning of 17 CFR §230.501(a) may invest in the Offering. As such, the Investor's investments could be subject to a cutback, and the Auto-Reinvestment Agreement subject to termination, in the event the Company meets or exceeds the maximum amount of the Offering or, in the event the investor is non-accredited, the Investor's cumulative amount of investments with the Company meets or exceeds the maximum investment amounts permitted by a non-accredited investor under Regulation A. Under either circumstance, the Investor would be redeemed for those Class A Investor Shares subject to the cutback.
- Investor Promises: The Investor promises, among other things, that the Shares shall not be transferred without complying with the terms of the Partnership Agreement, subject to rights of first refusal and securities laws limits.
- Forum Selection: The Auto-Reinvestment Agreement is governed by the internal laws of Delaware. If the Investor is not otherwise subject to service of process in Delaware, the Investor agrees to appoint and maintain an agent in Delaware to accept service, and to notify the Company of the name and address of such agent.
- Potential for Cutback of Additional Shares Purchased: As a Tier 2 offering under Rule 251(a), the Investor's Class A Investor Shares could be subject to a cutback, and the agreement subject to termination, in the event the Company meets or exceeds the maximum amount of the Offering or, in the event the investor is non-accredited, the Investor's cumulative amount of investments with the Company meets or exceeds the maximum investment amounts permitted by a non-accredited investor under Regulation A. Under either circumstance, the investor would be redeemed for those Class A Investor Shares subject to the cutback.
With respect to
auto-reinvestments, investors will receive an email notification that the
Company has made a distribution. The email will indicate what portion of the
distribution will be reinvested to purchase additional Class A Investor Shares
and will include a hyperlink to the then-current Offering Statement.
Page 43
The Company maintains a ledger of
each non-accredited investor to track the amounts such investor has made in
order to ensure compliance with the exemption. Furthermore, the Company
maintains a robust record-keeping system in order to monitor amounts raised
under the Offering. To the extent the Company exceeds the total Offering
amount, the Company will redeem those investors whose purchases of Class A
Investor Shares were in excess of the limits of the Offering and all
Auto-Reinvestment Agreements will be terminated, in each instance, pursuant to
their terms.
Upon receipt of the investor's
Re-Investment Agreement, Investor Information Sheet, and confirmation that the
investor has created an account on the Platform, the Company will take
reasonable steps to evaluate whether the information the investor has provided
is sufficient to establish whether such investor is accredited. If the investor
is not accredited, then pursuant to Rule 251(d)(2)(i)(C), the Company will
determine if the non-accredited investor's aggregate purchase price to be paid
by the investor is no more than ten percent (10%) of the greater of such
investor's: (1) annual income or net worth if a natural person; or (2) revenue
or net assets for such purchaser's most recently completed fiscal year end if a
non-natural person. The investor will provide this information on the Investor
Information Sheet and on the Platform.
To buy Class A Investor Shares,
go to the Platform and follow the instructions. You will be asked for certain
information about yourself, including:
·
Your name and address
·
Your email address
·
Your social security number (for tax reporting purposes)
·
Whether you are an "accredited investor"
·
If you not an accredited investor, your income and net worth
You will also be asked to sign an
Investment Agreement, a copy of which is available here.
To the extent you wish to
participate in the Offering by automatically investing on a periodic basis, you
will be asked to sign an Auto-Invest Agreement, a copy of which is available here.
To the extent you wish to
participate in the Offering by electing to use the amount of distributions that
you receive to purchase additional Class A Investor Shares, you will be asked
to sign an Auto-Reinvestment Agreement, a copy of which is provided here.
The minimum investment is $100.
You will pay for your Class A Investor Shares using one of the options
described on the Platform.
The information you submit,
including your signed Investment Agreement, is called your "subscription." The
General Partner will review your subscription and decide whether to accept it.
The General Partner has the right to accept or reject subscriptions in our sole
discretion, for any reason or for no reason.
When you invest, your money will
be held in an escrow account with a third party until your subscription is
reviewed and the General Partner decides whether to accept it. When and if the
General Partner confirms that your subscription is complete and decided to
accept your subscription, the General Partner will release your money from the
escrow account to the Company.
Once the General Partner has
accepted your subscription, you will be notified by email and the investment
process will be complete. The General Partner will also notify you by email if
it does not accept your subscription, although it might not explain why.
You will not be issued a paper
certificate representing your Class A Investor Shares.
Page 44
Anyone can buy Class A Investor
Shares. The General Partner does not intend to limit investment to people with
a certain income level or net worth, although there are limits on how much
non-accredited investors may invest in this Offering.
As long as an Investor is at
least 18 years old, they can invest in this Offering. But if the Investor not
an "accredited" investor, the amount they can invest is limited by law.
Under 17 CFR §230.501, a
regulation issued by the SEC, the term "accredited investor" means:
·
A natural person who has individual net worth, or joint net worth
with the person's spouse, that exceeds $1 million at the time of the purchase,
excluding the value of the primary residence of such person;
·
A natural person with income exceeding $200,000 in each of the
two most recent years or joint income with a spouse exceeding $300,000 for
those years and a reasonable expectation of the same income level in the
current year;
·
A trust with assets in excess of $5 million, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person;
·
A business in which all the equity owners are accredited
investors;
·
An employee benefit plan, within the meaning of the Employee
Retirement Income Security Act, if a bank, insurance company, or registered
investment adviser makes the investment decisions, or if the plan has total
assets in excess of $5 million;
·
A bank, insurance company, registered investment company,
business development company, or small business investment company;
·
A charitable organization, corporation, or partnership, not
formed for the specific purpose of acquiring the securities offered, with total
assets exceeding $5 million; or
·
A director, executive officer, or general partner of the company
selling the securities, or any director, executive officer, or general partner
of a general partner of that issuer.
If the Investor falls within any
of those categories, then the Investor can invest any amount permitted on the
Platform. If the Investor does not fall within any of those categories, then
the most they can invest in this Offering is the greater of:
·
10% of their annual income; or
·
10% of their net worth.
These limits are imposed by law,
not by the Company.
The Company will determine
whether an Investor is accredited when he, she, or it creates an account on the
Platform.
We have
filed with the SEC an offering statement under the Securities Act on
Form 1-A regarding this Offering. This Offering Circular, which is part of
the offering statement, does not contain all the information set forth in the
offering statement and the exhibits related thereto filed with the SEC,
reference to which is hereby made. Upon the qualification of the offering
statement, we will be subject to the informational reporting requirements that
are applicable to Tier 2 companies whose securities are qualified pursuant to
Regulation A, and accordingly, we will file annual reports, semi-annual
reports, and other information with the SEC. The SEC maintains a website
at www.sec.gov that contains reports, information
statements and other information regarding issuers that file with the SEC.
Page 45
You may
review these filings on our website and may also request a copy of these
filings at no cost, by contacting us at:
ENERGEA PORTFOLIO 5 LATAM LP
52 Main Street
Chester, CT 06412
www.energea.com
(860)-316-7466
So long
as we remain subject to the periodic reporting requirements of Regulation A,
within 120 days after the end of each fiscal year we will file on the SEC's
EDGAR website an annual report on Form 1-K. The annual report will contain
audited financial statements and certain other financial and narrative
information that we are required to provide to investors.
We also
maintain a website at www.energea.com, where there may
be additional information about our business, but the contents of that site are
not incorporated by reference in or otherwise a part of this Offering Circular.
Certain
legal matters with respect to the Class A Investor Shares will be passed upon
by the law firm of McCarter & English, LLP headquartered in Newark, New
Jersey.
The Company's financial statements for the
fiscal years ended December 31, 2024 and December 31, 2023 incorporated by
reference in this Offering Circular have been audited by Whittlesey PC, an
independent registered public accounting firm, as stated in its report
appearing herein. The financial statements have been included in reliance upon
that firm's report on its authority as an expert in accounting and auditing.
The Financial Statements included herein
represent are current as of the date of the Auditor's Report. Certain
information, including the expansion of the capitalization of the Company, have
occurred since the Financial Statements were issued and are therefore not
reflected therein.
|
Page
|
|
|
F-1
|
|
|
F-2
|
|
|
F-3
|
|
|
F-4
|
|
|
F-5
|
|
|
F-6 - F-8
|
Page 46
F-1
To
the Members of
Energea
Portfolio 5 LATAM LLC
Opinion
We have audited the accompanying
consolidated financial statements of Energea
Portfolio 5 LATAM LLC (the "Company"), which comprise the consolidated
balance sheets as of December 31, 2024 and 2023, and the related consolidated
statements of operations and comprehensive loss, changes in members' equity,
and cash flows for the years then ended, and the related notes to the
consolidated financial statements.
In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2024 and 2023, and the
results of its operations and its 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. Our
responsibilities under those standards are further described in the Auditors'
Responsibilities for the Audit of the Consolidated Financial Statements section
of our report. We are required to be independent of the Company 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 Consolidated 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, this includes 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.
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 the
Company's ability to continue as a going concern within one year after the date
that the consolidated financial statements are available to be issued.
Auditors'
Responsibilities for the Audit of the Consolidated 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
auditors' 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 generally accepted
auditing standards 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.
Page 47
In performing an audit in accordance with
generally accepted auditing standards, 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 the Company's 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 the Company's 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 audits, significant audit findings, and certain internal control
related matters that we identified during the audits.
Hartford,
Connecticut
July 25, 2025
Page 48
F-2
|
2024
|
2023
|
||
|
Assets
|
|||
|
Current assets:
|
|||
|
Cash
and cash equivalents
|
$ 1,310
|
$ 9,883
|
|
|
Other current assets
|
414
|
-
|
|
|
Total
current assets
|
1,724
|
9,883
|
|
|
Other noncurrent assets:
|
|||
|
Due from related entity
|
23,206
|
20,430
|
|
|
Total
other non current assets
|
23,206
|
20,430
|
|
|
|
|||
|
|
|||
|
Total assets
|
$ 24,930
|
$ 30,313
|
|
|
|
|||
|
Liabilities and members' equity
|
|||
|
Current liabilities:
|
|||
|
Accounts payable and accrued
expenses
|
$ 22,674
|
$ -
|
|
|
|
|||
|
Total liabilities
|
22,674
|
-
|
|
|
|
|||
|
Members' equity
|
2,256
|
30,313
|
|
|
|
|||
|
Total liabilities and members'
equity
|
$ 24,930
|
$ 30,313
|
Page
49
F-3
|
2024
|
2023
|
||
|
|
|||
|
Revenue
|
$ -
|
$ -
|
|
|
|
|||
|
Portfolio operating expenses:
|
|||
|
Accounting
|
10,000
|
2,750
|
|
|
Legal
|
22,294
|
2,483
|
|
|
Taxes
|
344
|
89
|
|
|
Other general and
administrative expenses
|
2,501
|
235
|
|
|
Total
portfolio operating expenses
|
35,139
|
5,557
|
|
|
|
|||
|
Net
loss from operations
|
(35,139)
|
(5,557)
|
|
|
|
|||
|
Other income/(expense):
|
|||
|
Realized foreign currency gain
|
699
|
1
|
|
|
Interest
expense
|
(2,532)
|
(629)
|
|
|
Interest income
|
2,240
|
688
|
|
|
Total
other income
|
407
|
60
|
|
|
|
|||
|
Net
loss
|
(34,732)
|
(5,497)
|
Page 50
F-4
|
Common Shares
|
Investor Shares
|
Accumulated Other
Comprehensive Income/(Loss)
|
Total Members'
Equity
|
||||||||
|
Shares
|
Amount
|
Shares
|
Amount
|
||||||||
|
|
|||||||||||
|
Members' equity, August 07, 2023 (Inception)
|
-
|
$-
|
-
|
$ -
|
$-
|
$ -
|
|||||
|
|
|||||||||||
|
Issuance of common shares
|
1,000,000
|
-
|
34,950
|
34,950
|
-
|
34,950
|
|||||
|
Unrealized foreign currency
exchange gain
|
-
|
-
|
-
|
-
|
860
|
860
|
|||||
|
Net loss
|
-
|
-
|
-
|
(5,497)
|
-
|
(5,497)
|
|||||
|
|
|
|
|
|
|
||||||
|
Members' equity, December 31, 2023
|
1,000,000
|
-
|
34,950
|
29,453
|
860
|
30,313
|
|||||
|
|
|||||||||||
|
Issuance of common shares
|
-
|
-
|
10,750
|
10,750
|
-
|
10,750
|
|||||
|
Cumulative translation
adjustment
|
-
|
-
|
-
|
(120)
|
-
|
(120)
|
|||||
|
Unrealized foreign currency
exchange loss
|
-
|
-
|
-
|
-
|
(3,955)
|
(3,955)
|
|||||
|
Net loss
|
-
|
-
|
-
|
(34,732)
|
-
|
(34,732)
|
|||||
|
|
|||||||||||
|
Members' equity, December 31,
2024
|
1,000,000
|
$-
|
45,700
|
$5,351
|
$(3,095)
|
$2,256
|
|||||
Page 51
F-5
|
2024
|
2023
|
||
|
|
|||
|
Cash flows from operating activities:
|
|||
|
Net
loss
|
$ (34,732)
|
$ (5,497)
|
|
|
Changes in assets and
liabilities:
|
|||
|
Other
current assets
|
(450)
|
-
|
|
|
Accounts payable and accrued
expenses
|
22,680
|
-
|
|
|
Due
from related entities
|
(5,718)
|
(19,690)
|
|
|
Due to related entity
|
-
|
(235)
|
|
|
Total
cash flows from operating activities
|
(18,220)
|
(25,422)
|
|
|
|
|||
|
Cash flows from financing
activities:
|
|||
|
Proceeds from issuance of
investor shares
|
10,750
|
34,950
|
|
|
Total
cash flows from financing activities
|
10,750
|
34,950
|
|
|
|
|||
|
Effect of exchange rate changes
on cash
|
(1,103)
|
355
|
|
|
|
|||
|
Change in in cash
|
(8,573)
|
9,883
|
|
|
|
|||
|
Cash at the beginning of the
period
|
9,883
|
-
|
|
|
|
|||
|
Cash at the end of the period
|
$ 1,310
|
$ 9,883
|
Page 52
F-6
December 31, 2024 and 2023
Note
1 - Organization, Operations and Summary of Significant Accounting Policies
Business organization and
operations
Energea Portfolio 5 LATAM LLC is a Delaware Limited
Liability Corporation formed on August 7, 2023 to invest in the
acquisition and construction of solar energy projects and/or to lend money to
Development Companies in South America, Central America and the Caribbean. The consolidated financial statements include the
accounts of Energea Portfolio 5 LATAM LLC and its wholly owned Colombian
subsidiary Energea Colombia S.A.S. The Company and its day-to-day operations
are managed by Energea Global LLC ("General Partner"). The Company works
in close cooperation with stakeholders, project hosts, industry partners and
capital providers to produce best-in-class results.
The Company's activities consist principally of
organization and pursuit costs, raising capital, securing investors and project
development activity. The Company's activities are subject to significant risks
and uncertainties, including the inability to secure funding to develop its
portfolio. The Company's operations are funded by the issuance of membership
interests and debt. There can be no assurance that any of these strategies will
be achieved on terms attractive to the Company. The Company anticipates it will
initiate a Regulation A Offering for the purpose of raising capital to fund
ongoing project development activities in early 2025. The Company will be
offering to sell interests designated as Investor Shares to the public up to
$75,000,000. The initial price of the existing Investor Shares was $1.00 per
share. The Company anticipates making its first investment in a project in
2025.
Basis of presentation
The
consolidated financial statements have been prepared on the accrual basis of
accounting in accordance with accounting principles generally accepted in the
United States of America ("US GAAP"). All intercompany transactions have been
eliminated in consolidation.
Use of estimates
The
preparation of the financial statements in conformity with US GAAP requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities, and disclosures of contingent assets and
liabilities, at the date of the financial statements and revenues and expenses
of the period. Actual results could differ from those estimates.
Cash and cash equivalents
Cash
and cash equivalents includes cash on hand, deposits at commercial banks and
short-term cash equivalents with original maturities of 90 days or less.
Capitalization and investment in project assets
A project has four basic phases: (i) development, (ii)
financing, (iii) engineering and construction and (iv) operations and maintenance. During the development phase, milestones are created to ensure that a project
is financially viable. Project viability is obtained when it becomes
probable that costs incurred will generate future economic benefits sufficient
to recover those costs.
Examples of milestones
required for a viable project
include the following:
· The identification, selection and acquisition of sufficient area required for a project;
· The confirmation of a regional electricity market;
· The confirmation of acceptable electricity resources;
· The confirmation of the potential to interconnect to the electric transmission grid;
· The determination of limited environmental sensitivity; and
· The confirmation of local community receptivity and limited potential for organized opposition.
Page 53
All project costs are expensed during the development
phase. Once the milestones for development are achieved, a project will be
moved from the development phase into the engineering and construction phases.
Costs incurred in these phases are capitalized as incurred, included
within construction in progress ("CIP"),
and not depreciated until
placed into commercial service. Once a project is placed into commercial
service, all accumulated costs will be
reclassified from CIP to property
and equipment and become subject
to depreciation or amortization over a specified estimated
life.
Revenue recognition
Our Revenue Recognition Policy follows ASC-606 which will
be a five-step procedure:
|
Procedure
|
Example
|
|
Step 1 - Identify the Contract
|
Project Rental Contract
|
|
Step 2 - Identify the Performance Obligations
|
Delivery of electricity from solar plant
|
|
Step 3 - Determine the
Transaction Price
|
Amount contractually signed
with Subscriber
|
|
Step 4 - Allocate the Transaction Price
|
Obligation is satisfied by transferring control of the
electricity produced to the Subscriber
|
|
Step 5 - Recognize Revenue
|
At a point in time when the
Subscriber is invoiced
|
Income taxes
On December 31, 2024 and 2023, no provision for federal
income taxes has been made in the consolidated financial statements since the
Company is wholly owned by the General Partner
and therefore is disregarded for federal and state income tax purposes. As
such, all income tax attributes of the Company are passed through to the General Partner to report on its income tax return.
The Company also evaluated and concluded that there are no
uncertain tax positions that would require recognition in the consolidated
financial statements. Interest on any income tax liability is reported as interest expense and
penalties on any income tax liability are reported as income taxes. The
Company's conclusions regarding uncertain tax positions may be subject to
review and adjustment at a later date based upon ongoing analysis of tax laws,
regulations and interpretations
thereof, as well as other factors.
Comprehensive Income/(Loss)
GAAP requires the reporting of
"comprehensive income/(loss)" within general purpose consolidated financial
statements. Comprehensive income/(loss) is comprised of two components, net
income/(loss) and comprehensive income/(loss). For the year ended December 31,
2024 and 2023, the Company had foreign currency exchange gain and losses
relating to currency translation from Colombian pesos to U.S. dollar reported
as other comprehensive gain and losses.
Foreign Currency Exchange
Transactions
Purchases of products and
services for the Colombian subsidiaries are transacted in the local currency,
Colombian pesos ("COP"), and are recorded in U.S. dollars and
translated at historical exchange rates prevailing at the time of the
transaction. Balances are translated into U.S. dollars using the exchange rates
at the respective balance sheet date. Realized exchange gains and losses are
included in foreign currency exchange income/(loss) on the accompanying
consolidated statements of operations and comprehensive income/(loss).
Unrealized exchange gains and losses are included in other comprehensive loss
on the accompanying consolidated statements of operations and comprehensive
loss. Unrealized translation (losses)/gains for the year ended December 31, 2024
and 2023 were $3,095 and $860, respectively. Realized translation gains for the
years ended December 31, 2024 and 2023 were $699 and $1, respectively.
Extended Transition Period
Under Section 107 of the
Jumpstart Our Business Startups Act of 2012, the Company is permitted to use
the extended transition period provided in Section 7(a)(2)(B) of the Securities
Act for complying with new or revised accounting standards. This permits the
Company to delay the adoption of certain accounting standards until those
standards would otherwise apply to private companies. The Company has elected
to use the extended transition period provided in Section 7(a)(2)(B) of the
Securities Act for complying with new or revised accounting standards that have
different effective dates for public and private companies until the earlier of
the date that the Company (i) is no longer an emerging growth company or (ii)
affirmatively and irrevocably opt out of the extended transition period
provided in Section 7(a)(2)(B). By electing to extend the transition period for
complying with new or revised accounting standards, these consolidated
financial statements may not be comparable to companies that adopt accounting
standard updates upon the public business entity effective dates.
Page 54
Subsequent events
In connection with the preparation of the consolidated
financial statements, the Company monitored and evaluated subsequent events as
of December 31 2024, through July 25, 2025, the date on which the consolidated
financial statements were available to be issued. There are no material
subsequent events that require recognition or disclosure in the consolidated
financial statements.
Note 2 - Related Party Transactions
F-7
The Company has transactions
between related companies from time to time. At December 31, 2024 and 2023, the
Company had $23,206 and $20,430, respectively, receivable from a company with
common ownership, which is included due from related parties on the
accompanying consolidated balance sheets.
Note 3 - Members' Equity
F-8
Common Shares
The Company authorized 1,000,000
common shares, which as of December 31, 2024 and 2023, 1,000,000 are issued and
outstanding. The shares represent membership interests in the Company.
Investor Shares
The Company authorized
500,000,000 Class A Investor Shares, which as of December 31, 2024 and 2023,
45,700 and 34,950, respectively, are issued and outstanding. The investor
shares represent membership interests in the Company.
Page 55
|
A 3.8% Net Investment Income Tax on certain investment
income of individuals, trusts, and estates under Section 1411 of the Code
|
|
|
Adjusted NOI
|
Adjusted Net Operating Income
|
|
Advisers Act
|
Investment Advisers
Act of 1940, as amended.
|
|
Ancillary Services
|
Support services like
operations, maintenance, and credit management provided to solar projects.
|
|
Authorizing Resolution
|
The authorization adopted by the General
Partner pursuant to the LP Agreement that created the Class A Investor
Shares.
|
|
Blue Sky Laws
|
State securities regulations.
|
|
Borrower
|
A party that repays the Company for a Loan through
principal and interest payments.
|
|
C&I
|
Commercial and industrial
offtakers
|
|
CAFD
|
Cash available for distribution.
|
|
Carried Interest
|
The right of the General Partner
to receive distributions under the LP Agreement, over and above its right to
receive distributions in its capacity as an Investor.
|
|
CFCs
|
Controlled foreign corporations
|
|
Class A Investor Shares
|
The limited partnership
interests in the Company being offered to Investors in this Offering.
|
|
Code
|
The Internal Revenue Code of 1986, as amended (i.e., the
federal tax code).
|
|
Collateral Agreements
|
A collection of agreements and
instruments designed to secure obligations under a primary financing
arrangement between a borrower and a lender.
|
|
Company
|
Energea Portfolio 5 Colombia LP, a Delaware limited
partnership, which is offering to sell Class A Investor Shares in this
Offering.
|
|
Company Investments
|
Cash-on-hand investments
generating returns, such as interest from savings accounts.
|
|
Construction Contract
|
The contract whereby the Company or SPE will hire a third
party to provide to provide engineering, procurement, and construction
services for a Project.
|
|
COP
|
Colombian Peso
|
|
Customer
|
Collectively refers to entities purchasing electricity or
utility services from the Company's renewable energy projects, as well as
borrowers of Loans. This includes entities under long-term Power Purchase
Agreements ("PPAs"), utility service contracts, and those receiving financing
for renewable energy project development.
|
|
Deferred Fees
|
Fees postponed by the General
Partner due to cash flow considerations, to be charged later at their
discretion.
|
|
Delaware LP Act
|
Governs the formation and operation of Delaware limited
partnerships.
|
|
DERMS
|
Distributed Energy Resource
Management Systems.
|
|
Development Company
|
A company focused on acquiring and/or developing solar
power projects.
|
|
DG
|
Distributed generation, where
power is produced locally and delivered directly to users through systems
like rooftop or community solar.
|
|
Energea Global
|
Energea Global LLC, a Delaware limited liability company,
which is owned by Michael Silvestrini and Chris Sattler and serves as the General Partner.
|
|
Energea Colombia SAS
|
A wholly-owned subsidiary of
Energea Portfolio 5 LATAM LP
|
|
Energy Rate
|
The price per kWh
|
|
Estimated NOI
|
Estimated Net Operating Income.
|
|
Exchange Act
|
The Securities Exchange Act of 1934.
|
|
Fees
|
Compensation paid to the General
Partner.
|
|
FINRA
|
Financial Industry Regulatory Authority, Inc.
|
|
Form 1-U
|
SEC form used to report
significant events or changes by companies under Regulation A.
|
|
General Partner
|
Energea Global LLC, a Delaware limited liability company.
|
|
GILTI
|
General Intangible Low-Tax
Income, a federal U.S. tax on profits made by companies outside the United
States.
|
Page 56
|
Helios
|
Helios Colombia S.A. E.S.P and Energía de la Alta S.A.
E.S.P, a Colombian utility company.
|
|
Helios Loan
|
A revolving loan issued to
Helios, with the option for the Company to advance funds under specified
terms.
|
|
HSEC
|
Health, Safety, Environment and Community
|
|
Interconnection
|
Permission to connect a project
to the electric grid.
|
|
Investment Agreements
|
Contracts signed to purchase or reinvest in Class A
Investor Shares.
|
|
Investment Committee (IC)
|
A multi-disciplinary committee
of experienced renewable energy executives of the General Partner which
decides which Projects the Company will invest in.
|
|
Investor
|
Anyone who purchases Class A Investor Shares in the
Offering.
|
|
IPPs
|
Independent Power Producers
|
|
IRR
|
Internal rate of return.
|
|
JOBS Act
|
Jumpstart
Our Business Startups Act of 2012
|
|
kWh
|
A single, billable
unit of energy generated by a Project
|
|
LATAM
|
Latin America
|
|
Latin America
|
Central America, South America and/or the Caribbean
|
|
Limited Partners
|
Owners of
Investor Shares
|
|
LP Agreement
|
The Company's Limited Partnership Agreement dated June 17,
2025.
|
|
Loan
|
Money lent to Development
Companies
|
|
Loan Agreement
|
Company provides loans directly to Customers, secured
by Project assets such as off-taker contracts or PPAs.
|
|
MSMEs
|
Micro, small, or medium-sized
enterprises
|
|
MTR
|
Minimum Technical Requirement.
|
|
NAV
|
Net Asset Value
|
|
NOI
|
Net Operating Income.
|
|
NPV
|
Net Present Value
|
|
Offering
|
The offering of Class A Investor Shares to the public
pursuant to this Offering Circular.
|
|
Offering Circular
|
The Offering Circular you are
reading right now, which includes information about the Company and the
Offering.
|
|
O&M
|
Operations and Maintenance
|
|
Partners
|
The General Partner and the
Limited Partners, collectively.
|
|
Platform
|
The General Partner's website: www.energea.com
|
|
Portfolio 2
|
Energea Portfolio 2 LP
|
|
Portfolio 3
|
Energea Portfolio 3 Africa LP
|
|
Portfolio 4
|
Energea Portfolio 4 USA LP
|
|
Power Purchase Agreement
|
A contract where the SPEs sell electricity generated by
the projects directly to customers.
|
|
PPA
|
Power Purchase Agreement
|
|
Preferred Equity Investors
|
Holders of Class A and Reg D Shares entitled to cash
distributions after expenses.
|
|
Preferred Return
|
A 7% per year preferred return
to Class A Investors before the General Partner earns a Carried Interest.
|
|
Project Maintenance Contract
|
A contract with a third party engaged by the SPE to
operate and maintain the projects after construction.
|
|
Project
|
A solar power product in which
the Company invests.
|
|
Purchase and Sale Agreement
|
A contract used by the Company to acquire Project rights
from a Development Company.
|
|
Purchase and Sale Agreements for
Environmental Commodities
|
A contract used when SPEs sell
environmental commodities (e.g., renewable energy credits) produced by the
projects to customers.
|
|
Redemption Plan
|
The redemption plan whereby Investors may request
redemption of their Class A Investor Shares following 60 days after purchase.
|
Page 57
|
Redemption Price
|
The price at which Redemption
Requests will be processed, based on the current price per Class A Investor
Shares at the time the Redemption Request is made, reduced by the aggregate
sum of distributions, if any, with record dates during the period between the
Redemption Request date and the redemption date, and subject to a discount
based on the time the Redemption Request is submitted.
|
|
Redemption Request
|
A request for redemption submitted through the Platform
for up to $50,000 in Class A Investor Shares.
|
|
Reg D Investors
|
Accredited investors
participating in Reg D Offerings.
|
|
Reg D Offerings
|
Private securities offerings under Rule 506(c), open only
to accredited investors.
|
|
Reg D Shares
|
Shares issued in Reg D
Offerings.
|
|
Regulations
|
Regulations issued under the Code by the Internal Revenue
Service.
|
|
Regulation A
|
Regulation A of the Securities
Act of 1933 is an exemption from registration requirements for public
offerings.
|
|
SEC
|
The U.S. Securities and Exchange Commission.
|
|
Securities Act
|
The Securities Act of 1933, as
amended.
|
|
Shares
|
Ownership interest in the Company.
|
|
Site Access
|
The Company's legal right to
enter a property to build and maintain a solar project.
|
|
SPE
|
Special-Purpose Entity
|
|
Trust Agreement
|
Financing managed through
trusts.
|
|
USD
|
The currency of the United States called dollars.
|
|
U.S. GAAP
|
United States Generally Accepted
Accounting Principles.
|
|
U.S. Holder
|
A beneficial owner of Class A Investor Shares that is a
U.S. citizen or resident, a U.S. corporation, a U.S. estate, or a U.S. trust
as defined for federal income tax purposes.
|
|
VAT
|
Value Added Tax
|
|
XIRR
|
Extended internal rate of return
|
|
Exhibit No.
|
Description of Exhibit
|
|
2.1**
|
|
|
2.2**
|
|
|
2.3**
|
|
|
2.4**
|
|
|
2.5**
|
|
|
2.6**
|
|
|
3.1**
|
|
|
4.1**
|
|
|
4.2**
|
|
|
4.3**
|
|
|
11.1**
|
|
|
11.2
|
Consent of McCarter &
English LLP (included in Exhibit 12)
|
|
12**
|
|
|
99.1**
|
|
|
99.2**
|
|
|
99.3**
|
|
|
99.4**
|
* Filed herewith
**Filed Previously
Page 58
Pursuant to the requirements of
Regulation A, the issuer certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form 1-A and has duly
caused this offering statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of Chester, State of Connecticut, on August
15, 2025.
Energea Portfolio 5 LATAM LP
By: Energea Global
LLC
By /s/ MICHAEL SILVESTRINI
Name: Michael Silvestrini
Title: Co-Founder and Managing
Partner
This offering statement has been
signed by the following person in the capacities and on the date indicated.
By /s/
MICHAEL SILVESTRINI
Name: Mike Silvestrini
Title: Co-Founder and Managing
Partner of Energea Global LLC (Principal Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
Date: August 15, 2025
Page 59