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AESF expects to raise $5,000,000 from the sale of Preferred Participation Interests (PPI) for the development and acquisition of solar produced revenue streams and distribute the earnings to our investors from long term investments.
The main benefits and revenue streams we plan for our investors are:
- Cash flow from the sale of electricity from owned projects
- Earning fees for the placement of financing
- Tax credit from owned projects – Federal 30%
- Maximum depreciation benefits to the investor owners – section 179 up to $500,000 and MACRES 5 to 7 years.
- Proceeds from the sale of solar projects to cash flow buyers or customers (off-takers)
We plan to invest all of the investor funds to purchase and develop solar projects that provide the revenue streams described above and to distribute those earnings in both guaranteed returns (8%) and bonus variable returns to our investors and managers. We are projecting investor returns in excess of 12% per annum for long term (longer than 7 years) ownership of solar projects.
The investors acquiring these Preferred Participation Interests (PPI) shares agree and understand that the tax codes concerning federal energy tax credits and depreciation deduction tax benefits are an integral part of the return on investment described in this offering. The 30% federal tax credits that will be passed through to investors as distributions from the purchase of investment projects are required to be held by the investor for a period of seven years. If sold or otherwise disposed of before the required holding period has been completed, the investor will be required to refund the credit to the US treasury on a prorated basis. The depreciation and section 179 depreciation benefits passed through to the investor also requires a repayment to the Treasury department if disposed sold or disposed of on a prorated basis. We highly recommend the investor discuss the subject matter of this paragraph in detail with your accountant or tax advisor. In order to provide protection from this recapture of tax benefits, we require the investor to hold his PPI certificate for a minimum of seven years. The Company will consider hardship and unusual circumstance in certain cases, but the Company assumes no obligation to acquire an investor’s shares prior to the end of the seven-year minimum holding period.
WHAT KIND OF PROJECTS WILL WE DEVELOP?
Our history and the experience of AEFC is in the development of solar projects for residential and smaller commercial customers. Even though we can develop utility scale projects we feel we can grow into the size of project based upon our experience, assessment of risk and availability of cash. Therefor we will finance and develop:
- Small to medium commercial and industrial solar projects
- Residential solar projects
- Solar projects containing multiple generation from solar and gas
- Landfill and other properties solar projects for municipal customers
- Air conditioning systems containing solar power such as “Perfectly Green Products”
HOW DO WE SHARE REVENUES AND PROFITS
The Fund will issue 1,000 Class A Preferred Participation Interests at $5,000.00 USD per interest (UNIT) to Investors and provide a guaranteed current return of 8% prior to any distributions to the Solar Project Developer. It is the intent of this fund to raise $5,000,000 with this offering.
The Fund will issue Class B Participation Interests to the Solar Project Developer (AEFC) in exchange for the Solar Project acquisition and “build to suit’ contracts and an agreement with the Fund to manage, market and develop these solar projects.
CLASS A PPI INVESTORS RECEIVE
The proceeds from the sale of the Class A Preferred Participation Interests will be utilized to acquire and build the solar projects designated by the Solar Project Developer. The Class A Preferred Participation Interests will receive
- The Investor will receive a guaranteed minimum 8% annual return
- The Investor will receive 80% of all cash proceeds from sale of electricity, rents or leases after deducting payments of guaranteed 8% annual return
- The investor will receive 100% of all depreciation and federal tax credits.
- The Investor will receive 80% of all additional sales events like the sale of a project to an outsider or any partial liquidation of the assets owned by the Fund.
CLASS B PPI MANAGERS RECEIVE
The Class B Preferred Participation Interests (held by AEFC) interests will receive:
- The Managers will receive 20% of all cash proceeds from sale of electricity, rents or leases after deducting payments of guaranteed 8% annual return
- The managers do not receive any depreciation and federal tax credits.
- The manager’s will receive 20% of distributions of other all additional sales events like the sale of a project to an outsider or any partial liquidation of the assets owned by the Fund.
- The Managers will receive a fee of 2% of all managed revenue. This amount is to be deducted before the 80% – 20 % split described above
- The Managers will receive a fee of .05% (1/2 of one percent) per quarter of all managed assets calculated and payable quarterly on total assets reported to Investors.