UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM 1-SA
SEMI-ANNUAL REPORT PURSUANT TO
REGULATION A
For the fiscal semi-annual period ended:
June 30, 2025
024-12347
(Commission File Number)
ENERGEA PORTFOLIO 2 LP
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
84-4611704
(I.R.S. Employer Identification No.)
52 Main Street, Chester, CT 06412
(Full mailing address of principal executive offices)
860-316-7466
(Issuer's telephone number, including area code)
Class A Investor Shares
(Title of each class of securities issued pursuant to Regulation A)
Page i
Table of
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Page ii
Caution
Regarding Forward-Looking Statements
We make statements in this Semi-Annual Report 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 Semi-Annual Report or in the
information incorporated by reference into this Semi-Annual Report.
The forward-looking statements included in this Semi-Annual Report
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 the 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 Brazilian renewable energy
markets that may limit our ability to attract or retain Subscribers (as defined
below);
·
defaults under Supporting Contracts (see "Summary of
Supporting Contracts" in the Offering Circular);
·
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;
·
the failure of Projects and Loans to yield anticipated
results;
·
exposure to liability relating to environmental and
health and safety matters;
Page 1
·
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 Semi-Annual Report. All
forward-looking statements are made as of the date of this Semi-Annual Report and
the risk that actual results will differ materially from the expectations
expressed in this Semi-Annual Report 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 Semi-Annual Report, 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 Semi-Annual Report, 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 Semi-Annual
Report will be achieved.
Our Business
Energea
Portfolio 2 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").
The
Company was created to invest in the acquisition, development, and operation of
solar energy projects in Brazil (each a "Project"). The Projects will be
rented to groups of households and businesses (which we collectively refer to
as "Subscribers") for monthly payments based on the amount of
electricity produced by the Project and credited to them. 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").
To
date, the Projects have produced a stable and predictable stream of cash flow
from Subscribers paying their monthly energy bills. As the Company earns
revenue from the sale of energy to Subscribers and receives interest payments
on Loans and/or Company Investments, it uses the revenue to pay for operating
expenses (see "Our Operating Costs and Expenses" in the Offering
Circular) and distributes 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" in the
Offering Circular. To date, the Company has not issued any Loans to Borrowers.
Page 2
Projects
are owned by special-purpose entities (each, a "SPE"). Each SPE is
organized as a Brazilian Limitada or Ltda, the Brazilian equivalent of a U.S.
limited liability company. Under Brazilian law, the assets and liabilities of a
Ltda are distinct. Thus, the liabilities of Projects held in one SPE will not
affect the assets of another Project held in a different SPE.
Description of Property
The
only property owned by the Company are the Projects. To date, the Company has
not issued any Loans.
Projects Acquired
As of the date of
this Semi-Annual Report the Company had acquired a total of 23
Projects.
|
Project Name
|
Entity Name
|
Project Size (AC)
|
Acquisition
Date
|
Amount Invested*
|
|
Salinas
|
|
5.0 MW
|
4/15/19
|
$265,148
|
|
Itaguai III
|
Energea Itaguai III Aluguel de
Equipamentos e Manutenção Ltda.
|
1.0 MW
|
3/6/20
|
$35,707
|
|
Iguatama
|
Energea Iguatama Aluguel de Equipamentos
e Manutencao Ltda.
|
2.3 MW
|
10/12/20
|
$2,536,004
|
|
Pedrinopolis
|
Energea Pedrinopolis Ltda.
|
2.3 MW
|
5/21/21
|
$118
|
|
Pedra do Indaiá
|
Energea Pedra do Indaiá Ltda.
|
2.3 MW
|
10/1/21
|
$4,574,848
|
|
Divinópolis III
|
Energea Divinopolis Ltda.
|
2.3 MW
|
12/23/21
|
$3,055,486
|
|
Araxa I
|
Energea Araxa I Ltda
|
2.5 MW
|
12/23/21
|
$314,926
|
|
Araxa II
|
Energea Araxa II Ltda
|
2.5 MW
|
12/23/21
|
$315,470
|
|
Divinópolis II
|
Energea Divinopolis II Ltda
|
2.5 MW
|
1/4/22
|
$4,220,712
|
|
Corumbaíba
|
Energea Corumbaíba Ltda
|
2.5 MW
|
9/9/22
|
$2,288,099
|
|
Diamantina II
|
Energea Diamantina II Ltda
|
2.5 MW
|
10/17/22
|
$133,417
|
|
Formiga I
|
Energea Formiga I Ltda
|
2.5 MW
|
10/17/22
|
$201,778
|
|
Formiga II
|
Energea Formiga II Ltda
|
1.5 MW
|
10/17/22
|
$73,236
|
|
Naque
|
Energea Naque Ltda
|
1.5 MW
|
10/17/22
|
$123,330
|
|
Micros I
|
Energea Micros I Ltda
|
1.1 MW
|
12/29/22
|
$1,037,215
|
|
Itabapoana
|
Energea Itabapoana Ltda
|
2.5 MW
|
12/29/22
|
$94,590
|
|
Aparecida do Taboado II
|
Energea Aparecida do Taboado II Ltda
|
2.5 MW
|
4/12/23
|
$168,898
|
|
Frei Inocêncio
|
Energea Frei Inocêncio Ltda
|
2.5 MW
|
4/12/23
|
$95,567
|
|
Nova Lacerda
|
Energea Nova Lacerda Ltda
|
2.5 MW
|
4/12/23
|
$73,611
|
|
Monte Sião
|
Energea Portfolio Geração de Projetos
MG II Ltda
|
2.5 MW
|
4/17/23
|
$95,833
|
|
Aparecida do Taboado I
|
Energea Aparecida do Taboado I Ltda
|
2.5 MW
|
5/24/23
|
$155,176
|
|
Iguatama
II
|
Energea
Iguatama II Ltda
|
2.5 MW
|
12/20/24
|
$1,892,794
|
|
Micros II
|
Energea Micros II Ltda
|
750kW
|
11/11/24
|
$456,388
|
|
TOTAL
|
|
|
$22,208,351
|
*
as of June 30, 2025
Page 3
Projects
Sold
As
of the date of this Semi-Annual
Report, the Company has sold 10
Projects.
|
Project Name
|
Entity Name
|
Project Size (AC)
|
Date Sold
|
Sale Price Net of Taxes
|
|
Salinas
|
Project Salinas Geracao S.A.
|
5.0 MW
|
05/11/2021
|
$147,717
|
|
Pedrinopolis
|
Energea
Pedrinopolis Ltda.
|
2.3 MW
|
05/11/2021
|
$150,379
|
|
Itaguai III
|
Energea Itaguai III Aluguel de
Equipamentos e Manutencao Ltda.
|
1.0 MW
|
05/19/2021
|
$44,408
|
|
Aparecida do Taboado I
|
Energea Aparecida do Taboado I Ltda
|
2.5 MW
|
06/06/2023
|
$136,029
|
|
Frei Inocêncio
|
Energea Frei Inocêncio Ltda
|
2.5 MW
|
06/06/2023
|
$124,925
|
|
Monte Sião
|
Energea Portfolio Geração de Projetos
MG II Ltda
|
2.5 MW
|
06/06/2023
|
$126,224
|
|
Nova Lacerda
|
Energea Nova Lacerda Ltda
|
2.5 MW
|
06/06/2023
|
$93,427
|
|
Formiga II
|
Energea Formiga II Ltda
|
1.5 MW
|
06/06/2023
|
$100,344
|
|
Naque
|
Energea Naque Ltda
|
1.5 MW
|
06/06/2023
|
$178,011
|
|
Itabapoana
|
Energea Itabapoana Ltda
|
2.5 MW
|
06/06/2023
|
$133,061
|
|
TOTAL
|
|
|
$1,234,525
|
Projects Owned
As
of the date of this Semi-Annual
Report, the Company holds 13 Projects. The table below lists
the total amount the Company invested into each Project and the estimated
Project cost. Please refer to the links in the column labeled "Form 1-U"
for the Project Memo which gives in-depth information regarding each Project
such as its location, the system size, contractors used to construct the
Project, information about other stakeholders, information about the buyer of
the energy and environmental commodities and the estimated economics of the
Project. The Project Memos can also be found on the Platform.
|
Project Name
|
Entity Name
|
Project Size (AC)
|
Estimated Projected Cost
|
Amount Invested*
|
Form
1-U
|
|
Iguatama
|
Energea
Iguatama Aluguel de Equipamentos e Manutencao Ltda.
|
2.3 MW
|
$2,536,004
|
$2,536,004
|
|
|
Pedra do Indaiá
|
Energea
Pedra do Indaiá Ltda.
|
2.3 MW
|
$4,574,848
|
$4,574,848
|
|
|
Divinopolis III
|
Energea
Divinopolis Ltda.
|
2.3 MW
|
$3,198,961
|
$3,055,486
|
|
|
Araxa I
|
Energea Araxa I
Ltda
|
2.5 MW
|
$324,291
|
$314,926
|
|
|
Araxa II
|
Energea Araxa
II Ltda
|
2.5 MW
|
$328,767
|
$315,470
|
|
|
Corumbaíba
|
Energea Corumbaíba Ltda
|
2.5 MW
|
$2,915,386
|
$2,288,099
|
|
|
Divinópolis II
|
Energea
Divinopolis II Ltda
|
2.5 MW
|
$4,312,924
|
$4,220,712
|
|
|
Micros I
|
Energea Micros I Ltda
|
1.1 MW
|
$1,040,946
|
$1,037,215
|
|
|
Aparecida do
Taboado II
|
Energea
Aparecida do Taboado II Ltda
|
2.5 MW
|
$203,303
|
$168,898
|
TBD
|
|
Diamantina II
|
Energea Diamantina II Ltda
|
2.5 MW
|
$152,090
|
$133,417
|
TBD
|
|
Formiga I
|
Energea Formiga
I Ltda
|
2.5 MW
|
$211,255
|
$201,778
|
TBD
|
|
Iguatama II
|
Energea Iguatama II Ltda
|
2.5 MW
|
$1,955,102
|
$1,892,794
|
|
|
Micros II
|
Energea Micros
II Ltda
|
750kW
|
$604,181
|
$456,388
|
|
|
|
TOTAL
|
|
$22,358,058
|
$21,196,035
|
|
*
as of June 30, 2025
Page 4
Item 1.
Management Discussion and Analysis of Financial Condition and Result of
Operation
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 Semi-Annual
Report. 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" in our Offering
Circular). Unless otherwise indicated, the latest results discussed below
are as of June 30, 2025.
Summary of Key Accounting Policies
Investments
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.
Impairment
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.
Revenue Recognition
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
· Step
2: Specify performance obligations
· Step
3: Establish transaction price
· Step
4: Allocate transaction price to performance obligations
· Step
5: Recognize revenue
Page 5
Market Outlook and Recent Trends
The
Brazilian solar market is expected to continue growing steadily through 2025
and 2026, with total installed capacity likely to exceed 50 gigawatts by the
end of the period. Growth is driven primarily by the distributed solar segment
(the segment the Company participates in), which represents more than 60
percent of national capacity and continues to benefit from high retail
electricity rates and favorable economics for Subscribers. While the
implementation of Law 14.300 has introduced a phased-in network usage fee for
new distributed solar projects, the grandfathering of legacy projects and
continued demand in the commercial and agricultural sectors are expected to
sustain momentum. To date, all of the Projects owned by the Company have been
grandfathered into the previous framework which minimizes network usage fees.
In the utility-scale
segment, the shift from government auctions to private bilateral contracts is
accelerating. Corporate offtake agreements-particularly in sectors such as
agribusiness and retail-are now the dominant driver of new project development,
supported by the ongoing expansion of Brazil's deregulated energy market. At
the same time, financing sources have diversified, with green debentures,
private credit, and international capital increasingly supplementing
traditional development bank funding.
Challenges
include transmission constraints in solar-intensive regions and continued
exposure to currency volatility. Despite these headwinds, Brazil remains one of
the most resilient solar markets in Latin America, with a maturing regulatory
framework, improving access to capital, and growing corporate demand supporting
its medium-term outlook.
Calculating
Distributions
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:
Sources of Distributable Cash Flow
·
Net income received from the Projects
·
Interest payments received from the Borrowers
·
Interest payments received from Company Investments
·
Net Proceeds from Capital Transactions
o
Originates from the sale or refinancing of Projects
o
Net proceeds are the gross proceeds of the capital transaction
minus associated expenses, including debt repayment
·
Liquidated Damages from Construction Agreements
o
Penalties paid by EPC Contractors when Projects are delivered
behind schedule
o
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:
Allocation of Distributions
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;
Page 6
·
Thereafter, any additional cash flow shall be distributed 70% to
Preferred Equity Investors and the Carried Interest to the General Partner.
Calculation of Preferred Return
The
General Partner discounts each month of Estimated NOI (see "Price of Class A
Investor Shares" in the Offering Circular) 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 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.
Calculation
of Carried Interest
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
30% of the excess and Preferred Equity Investors will get 70% of the excess.
Distributions
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
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 earning
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 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.
Below
is a table depicting the fees paid and distributions made from the Company
since inception. Note that whenever the table shows that the General Partner
has received its Carried Interest, the Investors have received their full
Preferred Return, as defined in "Allocations of Distributions". In those
cases where the General Partner does not receive its Carried Interest,
distributions were not sufficient to distribute to Investors their Preferred
Return.
Page 7
|
Distribution Date
|
Distributable Cash Flow
|
Preferred Return
|
Additional Cash Flow (70%)
|
Carried Interest* (30%)
|
Class A Investor Distributions**
|
Cash on Cash Yield***
|
|
5/20/21
|
137,235.23
|
50,103.18
|
82,716.23
|
4,415.82
|
132,819.41
|
20.18%
|
|
6/24/21
|
34,398.08
|
11,331.28
|
22,183.64
|
883.16
|
33,514.92
|
2.99%
|
|
7/24/21
|
33,961.13
|
8,663.79
|
24,414.18
|
883.16
|
33,077.97
|
2.74%
|
|
8/26/21
|
20,320.88
|
6,615.89
|
12,821.83
|
883.16
|
19,437.72
|
1.40%
|
|
9/23/21
|
20,320.79
|
6,829.13
|
12,608.50
|
883.16
|
19,437.63
|
1.27%
|
|
10/27/21
|
20,320.80
|
6,951.10
|
12,486.54
|
883.16
|
19,437.64
|
1.09%
|
|
11/30/21
|
20,320.80
|
7,054.00
|
12,383.64
|
883.16
|
19,437.64
|
1.02%
|
|
12/24/21
|
18,977.20
|
13,651.91
|
5,325.29
|
0.00
|
18,977.20
|
0.84%
|
|
2021 Total
|
$305,854.91
|
$111,200.28
|
$184,939.85
|
$9,714.78
|
$296,140.13
|
31.53%
|
|
1/26/22
|
10,973.59
|
3,316.66
|
5,890.61
|
1,766.32
|
9,207.27
|
0.32%
|
|
2/24/22
|
8,787.12
|
3,020.41
|
4,883.55
|
883.16
|
7,903.96
|
0.27%
|
|
3/29/22
|
9,860.27
|
3,957.94
|
5,019.17
|
883.16
|
8,977.11
|
0.28%
|
|
4/29/22
|
7,068.65
|
3,351.29
|
3,717.36
|
0.00
|
7,068.65
|
0.22%
|
|
5/31/22
|
7,068.14
|
2,992.40
|
4,075.74
|
0.00
|
7,068.14
|
0.21%
|
|
6/30/22
|
24,999.75
|
10,725.17
|
14,274.58
|
0.00
|
24,999.75
|
0.68%
|
|
7/29/22
|
25,000.10
|
6,134.70
|
18,865.40
|
0.00
|
25,000.10
|
0.66%
|
|
8/27/22
|
24,073.19
|
20,127.59
|
3,156.48
|
789.12
|
23,284.07
|
0.56%
|
|
9/27/22
|
23,677.18
|
10,506.53
|
10,536.52
|
2,634.13
|
21,043.05
|
0.48%
|
|
10/27/22
|
23,774.37
|
10,254.62
|
10,815.80
|
2,703.95
|
21,070.42
|
0.72%
|
|
11/29/22
|
33,759.97
|
14,656.27
|
15,282.96
|
3,820.74
|
29,939.23
|
0.44%
|
|
12/28/22
|
27,897.02
|
12,302.77
|
12,475.40
|
3,118.85
|
24,778.17
|
0.70%
|
|
2022 Total
|
$226,939.35
|
$101,346.35
|
$108,993.57
|
$16,599.43
|
$210,339.92
|
5.54%
|
|
1/27/23
|
23,705.24
|
10,855.76
|
11,623.77
|
1,225.71
|
22,479.53
|
0.39%
|
|
2/24/23
|
28,739.48
|
12,192.29
|
13,072.28
|
3,474.91
|
25,264.57
|
0.41%
|
|
3/27/23
|
33,687.38
|
15,314.18
|
15,617.22
|
2,755.98
|
30,931.40
|
0.48%
|
|
4/28/23
|
33,709.20
|
15,474.53
|
15,499.47
|
2,735.20
|
30,974.00
|
0.44%
|
|
5/30/23
|
35,708.77
|
16,432.24
|
16,385.05
|
2,891.48
|
32,817.29
|
0.43%
|
|
6/26/23
|
43,709.57
|
20,252.44
|
19,938.56
|
3,518.57
|
40,191.00
|
0.48%
|
|
7/25/23
|
98,709.19
|
45,896.06
|
44,891.16
|
7,921.97
|
90,787.22
|
0.95%
|
|
8/28/23
|
33,708.43
|
15,668.70
|
15,333.77
|
2,705.96
|
31,002.47
|
0.31%
|
|
9/27/23
|
85,715.70
|
41,000.83
|
38,007.64
|
6,707.23
|
79,008.47
|
0.76%
|
|
10/27/23
|
88,636.35
|
35,620.88
|
45,063.15
|
7,952.32
|
80,684.03
|
0.72%
|
|
11/24/23
|
83,704.70
|
40,601.46
|
36,637.08
|
6,466.16
|
77,238.54
|
0.67%
|
|
12/26/23
|
79,097.93
|
38,374.75
|
34,613.45
|
6,109.73
|
72,988.20
|
0.59%
|
|
2023 Total
|
$668,831.94
|
$307,684.12
|
$306,682.60
|
$54,465.22
|
$614,366.72
|
6.63%
|
|
1/26/24
|
57,055.87
|
26,770.27
|
25,742.36
|
4,543.11
|
52,512.63
|
0.41%
|
|
2/27/24
|
58,167.84
|
34,041.33
|
22,678.83
|
1,447.68
|
56,720.16
|
0.41%
|
|
3/26/24
|
67,053.57
|
32,587.99
|
32,397.48
|
2,068.10
|
64,985.47
|
0.46%
|
|
4/26/24
|
50,056.17
|
25,750.84
|
24,305.33
|
0.00
|
50,056.17
|
0.35%
|
|
5/24/24
|
50,361.60
|
26,356.09
|
24,005.48
|
0.00
|
50,361.57
|
0.34%
|
|
6/27/24
|
52,259.23
|
24,629.08
|
24,314.24
|
3,315.62
|
48,943.32
|
0.32%
|
|
7/26/24
|
72,671.64
|
37,364.11
|
35,306.85
|
0.00
|
72,670.96
|
0.47%
|
|
8/26/24
|
111,083.25
|
55,830.45
|
50,252.39
|
5,000.00
|
106,082.84
|
0.61%
|
|
9/27/24
|
112,739.23
|
53,582.40
|
50,282.70
|
8,873.52
|
103,865.10
|
0.57%
|
|
10/28/24
|
122,722.56
|
65,708.06
|
39,889.80
|
17,104.35
|
105,597.86
|
0.50%
|
|
11/26/24
|
131,924.48
|
68,088.72
|
55,506.92
|
8,298.65
|
123,595.64
|
0.57%
|
|
12/24/24
|
137,163.19
|
75,732.81
|
59,884.78
|
1,535.76
|
135,617.59
|
0.62%
|
|
2024 Total
|
$1,023,258.63
|
$526,442.15
|
$444,567.16
|
$52,186.79
|
$971,009.31
|
5.63%
|
|
1/24/25
|
92,252.30
|
54,300.15
|
37,952.14
|
0.00
|
92,252.30
|
0.41%
|
|
2/25/25
|
100,850.44
|
63,545.60
|
37,304.84
|
0.00
|
100,850.44
|
0.39%
|
|
3/27/25
|
100,000.00
|
67,246.88
|
32,753.12
|
0.00
|
100,000.00
|
0.37%
|
|
4/24/25
|
130,000.00
|
85,438.11
|
44,561.89
|
0.00
|
130,000.00
|
0.47%
|
|
5/23/25
|
127,195.89
|
84,823.22
|
42,372.66
|
0.00
|
127,195.89
|
0.43%
|
|
6/23/25
|
124,883.80
|
82,786.87
|
42,096.93
|
0.00
|
124,883.80
|
0.41%
|
|
7/29/25
|
145,803.72
|
98,210.93
|
47,592.79
|
0.00
|
145,803.72
|
0.45%
|
|
8/26/25
|
158,672.26
|
107,478.77
|
51,193.49
|
0.00
|
158,672.26
|
0.49%
|
|
2025 Total
|
$979,658.41
|
$643,830.54
|
$335,827.87
|
$0.00
|
$979,658.41
|
3.42%
|
|
TOTAL
|
$3,204,543.23
|
$1,690,503.44
|
$1,386,073.57
|
$127,966.22
|
$3,071,577.01
|
52.75%
|
Page 8
*Note:
The General Partner reserves the right to reduce its Management Fees and/or Carried Interest payments for any reason or to
protect the desired cash yield to Investors. For more information regarding the
Management Fees and Carried Interest paid to
our General Partner, see "Compensation of General Partner" in the Offering
Circular.
**Note:
Class A Investor distributions are equal to the Preferred Return plus any
additional cash flow, please see "Calculating Distributions".
***Note:
Monthly cash-on-cash yield values are calculated by dividing the Investor
Distributions amount by the total cost basis of all outstanding shares at the
time the distribution is issued. Year-end cash-on-cash yields are calculated by
summing all monthly cash-on-cash yields for the respective year.
Past Operating Results
During
the first half of 2025, the Company achieved solid growth in assets and revenue
while strategically investing in its Portfolio to support long-term expansion.
Although the semi-annual period resulted in a net loss, the increase in project
activity and higher operating income demonstrate continued progress in building
a stronger financial foundation and positioning the Company for future
profitability.
Operating Results for the Semi-Annual Period ended June 30, 2025
and 2024
As
of June 30, 2025 and December 31, 2024 the Company reported total assets of
$30,598,072 and $25,649,364, respectively, consisting of cash on hand of
$8,938,506 and $4,593,375, respectively, property and equipment net of
depreciation of $20,559,037and $19,417,432, respectively, other current assets
of $103,978 and $375,914, respectively, and non-current assets of $996,551 and
$1,262,643, respectively. Total liabilities and partners' equity were
$30,598,072 and $25,649,364, respectively, with liabilities of $5,727,141 and
$7,844,317, respectively, and equity owned by the investors of $24,870,931 and
$17,805,047.
For
the semi-annual period ended June 30, 2025 and June 30, 2024, the Company
generated revenue of $627,120 and $323,008, respectively, and total portfolio
operating expenses of $328,460 and $172,263, respectively, which included
professional fees, software subscriptions, depreciation, and other general and
administrative costs. Project-level operating expenses were $447,081 and
$180,583, respectively, covering professional fees, travel, depreciation,
insurance, operations and maintenance, and other administrative items. The
Company also recorded other income and expenses of ($316,790) and ($284,138),
respectively, resulting in a net loss of $465,211 and $313,976.
Leverage
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 (or other concurrent
offerings), it might make up the shortfall through borrowing. The General
Partner will make this decision on an as-needed basis.
On
October 5, 2020, the Company entered into a third-party Credit Agreement with
Lattice Energea Global Revolver I, LLC ("Lender"), which is unaffiliated
with the General Partner. This Agreement extends up to $5,000,000 of credit to
the Company which can be used to construct Projects. After construction, the
amounts owed convert into long-term project finance for a 10-year term. As of June
30, 2025 the Company's outstanding balance under the line of credit is $4,430,649.
On
December 22, 2023, the parties amended the above described Credit Agreement to
release the General Partner and establish the Company as the sole borrower.
This included certain underlying Projects as collateral: Iguatama, Pedra do
Indaiá, Divinopolis II, Divinopolis III, and Micros I.
Since
the interest rate on this loan is lower than the anticipated IRR of the
Projects, we expect this loan to lever returns to Investors while providing
liquidity necessary to accelerate through construction to achieve distributions
to Investors faster.
Page 9
Liquidity
and Capital Resources
We
are dependent upon the net proceeds from the Offering to conduct our proposed
investments. We will obtain the capital required to purchase new Projects and
to issue Loans and conduct our operations from the proceeds of the Offering and
any future offerings we may conduct, from secured or unsecured financings from
banks and other lenders, from short term advances from the General Partner and
from undistributed funds from our operations. As of June 30, 2025, the Company
had $8,938,506 of cash on hand and equivalents, which will be used to complete
the acquisition of new Projects approved by the Investment Committee, issuance
of new Loans, and short-term investments.
Method
of Accounting
The
compensation described in this section was calculated using the accrual method
in accordance with U.S. GAAP.
Item 2. Other Information
On
June 3, 2025, the Company filed a Form 1-U (found here)
disclosing the conversion of Energea Portfolio 2 LLC to Energea Portfolio 2 LP
and related updates to our governing documents. This filing was accompanied by
a corresponding supplement to our Offering Circular filed pursuant to Rule
253(g)(2), which is publicly available on the SEC's website.
Item 3.
Consolidated Financial Statements
Index to Unaudited Consolidated Financial
Statements
|
Section
|
Page
|
|
|
F-1
|
|
|
F-2
|
|
|
F-3
|
|
|
F-4
|
|
|
F-5
|
|
|
F-5
|
|
|
F-8
|
|
|
F-9
|
|
|
F-9
|
|
|
F-10
|
|
|
F-10
|
|
|
F-11
|
|
|
F-12
|
Page 10
Consolidated Balance Sheet
|
June 30, 2025 and December 31, 2024
|
|
As of 06/30/25
|
|
As of 12/31/24
|
|
Unaudited
|
|
Audited
|
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash and cash equivalents
|
$ 8,938,506
|
|
$ 4,593,375
|
|
Accounts
receivable
|
823
|
|
98,658
|
|
Prepaid expenses and other current assets
|
103,155
|
|
277,256
|
|
Total
current assets
|
9,042,484
|
|
4,969,289
|
|
|
|
|
|
|
Property and equipment:
|
|
|
|
|
Property and equipment
|
14,261,573
|
|
14,176,612
|
|
Construction
in progress
|
6,934,463
|
|
5,638,740
|
|
Total property and equipment
|
21,196,036
|
|
19,815,352
|
|
Less
accumulated depreciation
|
(636,999)
|
|
(397,920)
|
|
Total property and equipment, net
|
20,559,037
|
|
19,417,432
|
|
|
|
|
|
|
Other
noncurrent assets:
|
|
|
|
|
Operating
lease right-of-use assets
|
996,551
|
|
1,262,643
|
|
Total other noncurrent assets
|
996,551
|
|
1,262,643
|
|
|
|
|
|
|
Total assets
|
$ 30,598,072
|
|
$ 25,649,364
|
|
|
|
|
|
|
Liabilities
and partners'/members' equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Accounts payable and accrued expenses
|
$ 196,442
|
|
$ 1,962,757
|
|
Operating
lease liabilities, current portion
|
5,458
|
|
5,845
|
|
Due to related party
|
29,253
|
|
28,306
|
|
Line
of credit note payable, current portion
|
112,270
|
|
105,614
|
|
Total current liabilities
|
343,423
|
|
2,102,522
|
|
|
|
|
|
|
Non-current
liabilities:
|
|
|
|
|
Operating
lease liabilities, long-term portion
|
1,065,339
|
|
1,365,566
|
|
Line of credit note payable, long-term portion
|
4,318,379
|
|
4,376,229
|
|
Total
noncurrent liabilities
|
5,383,718
|
|
5,741,795
|
|
|
|
|
|
|
Total
liabilities
|
5,727,141
|
|
7,844,317
|
|
|
|
|
|
|
Partners'/members' equity:
|
|
|
|
|
Total shares and accumulated deficit
|
25,511,124
|
|
18,330,479
|
|
Total
accumulated other comprehensive loss
|
(640,193)
|
|
(525,432)
|
|
|
|
|
|
|
Total
partners'/members' equity
|
24,870,931
|
|
17,805,047
|
|
|
|
|
|
|
Total
liabilities and partners'/members' equity
|
$ 30,598,072
|
|
$ 25,649,364
|
F-1
Consolidated Statement of Operations
|
For the years periods ending June 30, 2025 and June
30, 2024
|
|
|
|
|
|
|
As of 06/30/25
|
|
As of 06/30/24
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
Revenue
|
$ 627,120
|
|
$ 323,008
|
|
|
|
|
|
|
Projects
operating expenses:
|
|
|
|
|
Professional
fees
|
5,174
|
|
431
|
|
Credit management
|
1,740
|
|
-
|
|
Depreciation
|
215,968
|
|
73,026
|
|
Insurance
|
16,421
|
|
8,063
|
|
Land
rental
|
53,093
|
|
19,550
|
|
Operation and maintenance
|
84,112
|
|
65,664
|
|
Other
projects operating expenses
|
70,573
|
|
13,849
|
|
Total projects operating expenses
|
447,081
|
|
180,583
|
|
|
|
|
|
|
Portfolio
operating expenses:
|
|
|
|
|
Professional
fees
|
27,925
|
|
114,325
|
|
Depreciation
|
23,111
|
|
11,317
|
|
Advertising
and marketing
|
-
|
|
2,500
|
|
Management fees
|
268,685
|
|
35,529
|
|
Regulatory
|
1,370
|
|
1,860
|
|
Other general and administrative expenses
|
7,369
|
|
6,732
|
|
Total
portfolio operating expenses
|
328,460
|
|
172,263
|
|
|
|
|
|
|
Loss
from operations
|
(148,421)
|
|
(29,838)
|
|
|
|
|
|
|
Other income/(expense):
|
|
|
|
|
Amortization
of Intangible asset
|
(58)
|
|
-
|
|
Realized
foreign currency loss/(gain)
|
(5,021)
|
|
583
|
|
Interest income
|
101,123
|
|
10,326
|
|
Interest
expense
|
(303,687)
|
|
(241,305)
|
|
Taxes
|
(101,115)
|
|
(53,309)
|
|
Net
miscellaneous income/(expense)
|
(8,032)
|
|
(433)
|
|
Total other income/(expense)
|
(316,790)
|
|
(284,138)
|
|
|
|
|
|
|
Net loss
|
(465,211)
|
|
(313,976)
|
|
|
|
|
|
|
Other
comprehensive loss:
|
|
|
|
|
Unrealized
foreign currency exchange loss
|
(114,578)
|
|
(26,827)
|
|
|
|
|
|
|
Comprehensive
loss
|
$ (579,789)
|
|
$ (340,803)
|
F-2
Consolidated Statement of Changes in
Members' Equity
|
|
|
|
|
|
|
|
|
|
|
Accumulated Other
|
|
|
|
Common Shares
|
|
Investor Shares
|
|
Accumulated
|
|
Comprehensive
|
|
Total Members'/
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Deficit
|
|
Loss
|
|
Partners' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity,
January 01, 2024
|
1,000,000
|
|
-
|
|
14,861,827
|
|
12,273,142
|
|
(1,752,678)
|
|
(277,131)
|
|
10,243,333
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of investor shares
-
Net of Stock Issuance Costs
of $82,222
|
-
|
|
-
|
|
10,235,239
|
|
9,500,731
|
|
-
|
|
-
|
|
9,500,731
|
|
|
Non-dividend
distributions
|
-
|
|
-
|
|
-
|
|
-
|
|
(971,009)
|
|
-
|
|
(971,009)
|
|
|
Net loss
|
-
|
|
-
|
|
-
|
|
-
|
|
(713,318)
|
|
-
|
|
(713,318)
|
|
|
Cumulative
translation adjustment (CTA)
|
|
|
-
|
|
-
|
|
-
|
|
(6,389)
|
|
-
|
|
(6,389)
|
|
|
Unrealized foreign currency
translation loss
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(248,301)
|
|
(248,301)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members' equity,
December 31, 2024
|
1,000,000
|
|
$ -
|
|
25,097,066
|
|
$ 21,773,873
|
|
$ (3,443,394)
|
|
$ (525,432)
|
|
$ 17,805,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Issuance of investor shares
- Net of Stock Issuance Costs of $1,040,522
|
-
|
|
-
|
|
9,472,795
|
|
8,320,853
|
|
-
|
|
-
|
|
8,320,853
|
|
|
Non-dividend
distributions
|
-
|
|
-
|
|
-
|
|
-
|
|
(675,180)
|
|
-
|
|
(675,180)
|
|
|
Net loss
|
-
|
|
-
|
|
-
|
|
-
|
|
(465,211)
|
|
-
|
|
(465,211)
|
|
|
Cumulative
translation adjustment (CTA)
|
|
|
-
|
|
-
|
|
-
|
|
183
|
|
-
|
|
183
|
|
|
Unrealized foreign currency
translation loss
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(114,761)
|
|
(114,761)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Conversion from LLC to LP -
June 03,2025
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Partners' equity, June 30,
2025
|
1,000,000
|
|
$ -
|
|
34,569,861
|
|
$ 30,094,726
|
|
$ (4,583,602)
|
|
$ (640,193)
|
|
$ 24,870,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of Cash Flows
|
As of 06/30/25
|
|
As of 06/30/24
|
|
Unaudited
|
|
Unaudited
|
|
|
|
|
|
|
Cash flows
from operating activities:
|
|
|
|
|
Net
loss
|
$ (465,211)
|
|
$ (313,976)
|
|
Depreciation
|
239,079
|
|
84,343
|
|
Non-cash
gain on lease termination/(lease expense)
|
(27,477)
|
|
54,544
|
|
Changes in assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
97,835
|
|
(11,390)
|
|
Prepaid expenses and other current assets
|
174,101
|
|
367,551
|
|
Loan
receivable interest added to principal
|
-
|
|
(7,556)
|
|
Accounts payable and accrued expenses
|
(1,766,315)
|
|
(448,930)
|
|
Due
from related party
|
-
|
|
160,385
|
|
Due to related party
|
945
|
|
7,554
|
|
Total
cash flows from operating activities
|
(1,747,043)
|
|
(107,475)
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
Purchase of property and equipment
|
(1,380,684)
|
|
(2,287,100)
|
|
Total
cash flows from investing activities
|
(1,380,684)
|
|
(2,287,100)
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
Net (repayments)/advances on note payable
|
(58,237)
|
|
(143,074)
|
|
Issuance
of investor shares
|
8,320,853
|
|
2,652,243
|
|
Non-dividend distribution
|
(675,180)
|
|
(323,579)
|
|
Total
cash flows from financing activities
|
7,587,436
|
|
2,185,590
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash
|
(114,578)
|
|
(149,556)
|
|
|
|
|
|
|
Increase/(decrease) in cash
and cash equivalents
|
4,345,131
|
|
(358,541)
|
|
|
|
|
|
|
Cash at the beginning of
the period
|
4,593,375
|
|
470,153
|
|
|
|
|
|
|
Cash at the end of the
period
|
$ 8,938,506
|
|
$ 111,612
|
|
|
|
|
|
|
Supplemental disclosure of
non-cash activities:
|
|
|
|
|
Operating
lease right-of-use asset obtained in exchange for new operating lease
liability
|
$ (284,083)
|
|
$ 226,470
|
F-4
Notes To Consolidated Financial Statements
June
30, 2025 and December 31, 2024
Note 1 - Organization,
Operations and Summary of Significant Accounting Policies
Business
organization and operations
Energea Portfolio 2 LP (the
"Company"), formerly known as Energea Portfolio 2 LLC is a Delaware Limited
Liability Corporation formed to develop,
own, and manage a portfolio of renewable energy projects in Brazil. The
consolidated financial statements include the accounts of Energea Portfolio 2
LLC and its wholly owned Brazilian single purpose entities ("SPEs"): Energea
Iguatama Aluguel de Equipamentos e Manutençao Ltda; Energea Iguatama II Ltda;
Energea Pedra do Indaia Ltda; Energea Araxá I Ltda; Energea Araxá II Ltda; and
Energea Divinopolis II Ltda, Energea Divinopolis III Ltda, Energea Formiga I
Ltda, Energea Diamantina II Ltda, Energea Micros I Ltda, Energea Micros II
Ltda; Energea Corumbaiba Ltda and Energea Aparecida do Taboado II Ltda. The Company and its day-to-day operations are managed by
Energea Global LLC ("General Partner"). The Company commenced operations on January 13, 2020.
Effective June 03, 2025, the Company converted from a
Limited Liability Company (LLC) to a Limited Partnership (LP). The conversion
was undertaken for alignment of management and ownership structure. As a result
of this change, the Company's legal form and ownership structure were modified.
However, its classification for U.S. federal income tax purposes remains
unchanged, the Company continues to be treated as a corporation. Management has
determined that the conversion does not constitute a change in the reporting
entity. Accordingly, comparative financial information for periods prior to the
conversion has not been restated and reflects operations under the LLC
structure.
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 have been funded by the issuance of
membership interests (prior to conversion). There can be no assurance that any
of these strategies will be achieved on terms attractive to the Company. During
2021, the Company initiated an offering of its Class A Investor Shares (the
"prior offering") under Regulation A of the Securities Act of 1933, as amended,
to support ongoing project development. As of June 30, 2025, the Company had
raised a total of $31,422,894 through this offering. After deducting issuance
costs of $1,328,167, net proceeds totaled $30,094,727. Since inception, the
Company has distributed $2,767,036 to investors as non-dividend returns of
capital.
Basis of
presentation
The consolidated financial statements include the
accounts of the Company, and its subsidiaries,
and have been prepared on the accrual basis of accounting in accordance with
accounting principles generally accepted in the United States of America ("US
GAAP").
Basis of Consolidation
The consolidated financial statements include the financial
statements of the Company, as well as wholly owned SPEs. The accounting
policies of the Company's SPEs are consistent with the Company's accounting
policies and all intercompany transactions have been eliminated in
consolidation.
Use of estimates
The preparation of the consolidated 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
consolidated financial statements and revenues and expenses of the period.
Actual results could differ from those estimates.
F-5
Cash and cash
equivalents
Cash and cash equivalents include 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.
All project costs are expensed during the development
phase. Once the milestones for development are achieved, a project is 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 are reclassified from CIP to property and equipment and
become subject to depreciation or amortization over a specified estimated life.
Property and equipment
Property and equipment consist of investments in solar projects. The Company accounts for investments in
solar projects under ASC 360. The property and equipment are carried at cost
and are depreciated on a straight-line basis over the estimated useful life of
the related assets, which range from 20 to 30 years. Additions, renewals, and
betterments that significantly extend the life of the asset are capitalized.
Expenditures for repairs and maintenance are charged to expense as incurred.
The Company reviews long-lived assets for impairment under ASC
360 guidelines, whenever events or circumstances indicate that the carrying
value of such assets may not be fully recoverable. During the periods ended June 30, 2025 and December 31, 2024, there was no impairment losses recognized for
long-lived assets.
Revenue recognition
To
date, all of the SPE's have Equipment Rental Agreements and Operation and Maintenance Service Agreements ("O&M
Agreement"). There are currently no land lease agreements. The
agreements are with various subscribers who will pay a monthly fee for the
renewable energy upon completion of the projects. Projects are considered
complete when they are tested, commissioned, interconnected to the grid and
capable of producing electricity as designed. The Company recognizes the
revenue from both Equipment Rental Agreements and O&M Agreements
concurrently using the same revenue recognition procedures when the single
invoice is sent to the customer. Therefore, the revenue is not split between
the Equipment Rental Agreement and O&M Agreement; instead, it is recognized
as a single revenue amount. The agreements are in effect for twenty-five years
from the completion date and are expected to have combined gross revenues of
$131.876.044 (unaudited) from all projects when operational.
F-6
The
Company's revenue recognition Policy follows ASC-606 which is 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
|
Comprehensive
Loss
US
GAAP requires the reporting of "comprehensive loss" within general purpose
financial statements. Comprehensive income/(loss) is comprised of two
components, net income/(loss) and comprehensive income/(loss). For the periods
ended June 30, 2025 and December 31, 2024 the Company had foreign currency
exchange losses relating to currency translation from Brazilian real to U.S.
dollar reported as other comprehensive loss.
Income taxes
Effective January 1, 2021, the Company has elected to be
taxed as a C-Corporation for federal, state, and local income tax reporting
purposes. Deferred tax assets and liabilities are recognized for the future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets, including tax loss and credit carryforwards, and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. The effect on deferred tax assets and liabilities of a
change
in tax rates is recognized in income in the period that
includes the enactment date. Valuation allowances are established to reduce
deferred tax assets to the amount expected to be realized.
The Company also 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.
Leases
The
Company determines if an arrangement is a lease at inception. Lease
right-of-use ("ROU") assets represent the Company's right to use an underlying
asset for the lease term and operating lease liabilities represent the
Company's obligation to make lease payments arising from the lease. Lease ROU
assets and lease liabilities are recognized at commencement date based on the
present value of lease payments over the lease term. As the Company's leases do
not provide an implicit rate, the Company uses its incremental borrowing rate
based on the information available at commencement date in determining the
present value of lease payments. The lease ROU asset also includes any lease
payments made and excludes lease incentives. The lease terms may include options
to extend or terminate the lease when it is reasonably certain that the Company
will exercise that option. Lease expense for lease payments is recognized on a
straight-line basis over the lease term. The Company has lease agreements with
lease and non-lease components, which are generally accounted for separately.
Concentrations
Financial instruments which potentially
subject the Company to concentrations of credit risk consist principally of
cash and cash equivalents. The Company maintains its cash and cash equivalents
in bank deposits at high credit quality financial institutions. The balances,
at times, may exceed federally insured limits.
F-7
Foreign
Currency Exchange Transactions
Purchases
of products and services for the Brazilian subsidiaries are transacted in the
local currency, Brazilian real (R$), and are recorded in U.S. dollars
translated at historical exchange rates prevailing at the time of the
transaction. Balances are translated into U.S. dollar using the exchange rates
at the respective balance sheet date. Realized exchange gains and losses are
included in foreign currency exchange loss on the accompanying consolidated
statements of operations and comprehensive loss. Unrealized exchange gains and
losses are included in other comprehensive loss on the accompanying
consolidated statements of operations and comprehensive loss. Unrealized
exchange gains and losses are included in other comprehensive loss in the
accompanying consolidated statements of operations and comprehensive loss. For
the periods ended June 30, 2025, and December 31, 2024, unrealized translation
losses totaled $114,761 and $248,301, respectively. Realized translation losses
(gains) for the six-month periods ended June 30, 2025, and June 30, 2024, were
$5,021 and $583, 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.
Subsequent events
In
connection with the preparation of the consolidated financial statements, the
Company monitored and evaluated subsequent events for the period ended June 30,
2025, through September 30, 2025, the date on which the consolidated financial
statements were available to be issued.
There are no material subsequent events that require recording or disclosure in
the consolidated financial statements.
Note 2 - Construction
in Progress
The Company is in the process of developing and
constructing renewable energy facilities in Brazil. All project costs
subsequent to the development phase are being capitalized and include hard
costs, such as equipment and construction materials, and soft costs, such as
engineering, architectural, legal, permits, developer fees and other costs. The
balance of CIP on June 30, 2025 and December 31, 2024 was $6,934,463 and
$5,638,740, respectively. The Company expects to incur an additional $1,070,700
of costs to complete the projects that have not yet completed or begun
construction which include the projects owned by Energea Corumbaiba, Energea
Divinopolis III Ltda and Energea Micros II Ltda.
F-8
Note 3 - Property and Equipment
The
Company's property and equipment as of June 30, 2025 and December 31, 2024, is
outlined in the following roll-forward summary:
|
2025
|
|
2024
|
|
|
|
|
|
|
Beginning
property and equipment
|
$ 19,815,352
|
|
$ 13,626,838
|
|
Additions
|
1,380,684
|
|
6,188,514
|
|
Ending
property and equipment
|
21,196,036
|
|
19,815,352
|
|
|
|
|
|
|
Beginning
accumulated depreciation
|
(397,920)
|
|
(119,007)
|
|
Depreciation
expense
|
(239,079)
|
|
(278,913)
|
|
Ending
accumulated depreciation
|
(636,999)
|
|
(397,920)
|
|
Property and
equipment, net
|
$ 20,559,037
|
|
$ 19,417,432
|
Note 4 - Line of Credit
Note Payable
In
October 2020, the Company, along with its majority member-manager, entered into
a revolving credit agreement (the "Agreement") with a debt provider to provide
funding for the construction projects in Brazil. The Agreement calls for a line
of credit with total availability of $5,000,000 to be used solely to finance
the purchase, development, and construction of the three Brazilian projects.
Interest is payable in quarterly installments at an annual rate of 15% through
the date of term loan conversion and 13% until maturity date of October 5,
2030.
The
Company may elect to defer up to 50% of each quarterly interest installment,
provided that such deferred interest will be treated as principal and repaid in
accordance with the Agreement. The line of credit is secured by a pledge of the
Manager's Class A Investor Shares and Common Shares in the Company as well as a
fiduciary lien on the assets owned by Energea Iguatama Aluguel de Equipamentos
e Manutençao Ltda, Energea Pedra do Indaia Ltda and Energea Divinopolis II
Ltda. As of June 30, 2025 and December 31, 2024, the Company hasn't deferred
any interest installment or added interest to the principal.
The
Company may repay or prepay outstanding revolving notes with prior approval of
the lender. In addition, the Company is required to repay outstanding principal
with the proceeds of any sales of the projects within ten days following
receipt of the sales proceeds, or in the event a project is canceled or unable
to be completed.
If
any projects have completed construction prior to the line of credit maturity
date, the Company may elect to convert the revolving line of credit to a term
loan, subject to certain limitations, provided the Company has met all
financial covenants and other requirements, as defined. Term loans require
quarterly repayments of principal plus interest at 13% per annum, in advance,
over a term of ten years. The company intends to exercise this option, so the
line of credit is recorded as long-term on the accompanying consolidated
balance sheets.
As
of June 30, 2025, and December 31, 2024, the Company's outstanding balance
under its line of credit was $4,430,649 and $4,481,843, respectively. Interest
incurred during the construction phase is capitalized as
construction-in-progress (CIP). As of June 30, 2025, the total capitalized
interest amounted to $1,329,039 and is included in property and equipment on
the consolidated balance sheet. Interest incurred during the operational phase
is expensed as incurred. For the six-month period ended June 30, 2025, the
Company recognized loan interest expense of $302,505 in the consolidated
statement of operations, compared to $240,105 for the same period in 2024.
F-9
Note 5 - Related Party
Transactions
The
Company has transactions between related companies from time to time. As
of June 30, 2025 and December 31, 2024, the Company
had payables of $29,252 and $28,306, respectively, to an entity
under common ownership. As of the same dates, the Company had no
receivables from related entities. These amounts are presented as due
to/from related parties on the accompanying consolidated balance sheets.
As
of June 30, 2025 and December 31, 2024, the SPE's with operational projects
entered into an O&M Agreement with a related party to perform continued
maintenance on the projects. The agreement is in effect for ten years from the
date of issuance of the Order of Service. The price is fixed based on the size
of the project, adjusted on the first (1st) anniversary of the Order of
Service, and each anniversary thereafter, in accordance with General Market
Price Index. For the six-month periods
ended June 30, 2025 and 2024, the Company incurred O&M
fees of $21,195 and $38,354, respectively, which were
recognized as expense in the consolidated statement of operations. These related
party O&M fees are included in total operations and maintenance expenses on
the consolidated statement of operations and are not separately presented, as
the Company also incurs O&M expenses from unrelated third-party vendors.
As
of June 30, 2025, and December 31, 2024, the SPEs with operational projects
entered into a 20-year Credit Management Agreement with a related party to
manage the Consortium responsible for commercializing project-generated energy.
Services include customer onboarding, invoicing, collections, credit control,
and reporting. The price is fixed based on the size of the project, adjusted on
the first (1st) anniversary of the contract signature, and each anniversary
thereafter. For the six-month periods ended June 30, 2025 and 2024, the Company
incurred credit management fees of $1,740 and $0, respectively, recognized as
expense in the consolidated statement of operations.
Note 6 - Leases
The
Company has a land lease for the Energea Iguatama Aluguel de Equipamentos e
Manutençao Ltda property with an annual rent of approximately $11,869 expiring
in February 2049. The monthly base rent increases each lease year by the
General Market Price Index.
A
second lease for Energea Iguatama II Ltda property with an annual rent of
approximately $24,302 which will expire in July 2047. The monthly base rent
increases each lease year by the General Market Price Index
A
third lease for the Energea Pedra do Indaiá Ltda with an annual rent of
approximately $16,020 which will expire in April 2047. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
A
fourth lease for the Divinopolis III Ltda property with an annual rent of
approximately $19,913 which will expire in June 2047. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
A
fifth lease for the Energea Araxa I Ltda property with an annual rent of
approximately $18,871 which will expire in January 2047. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
A
sixth lease for the Energea Araxa II Ltda property with an annual rent of
approximately $18,871 which will expire in January 2047. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
A
seventh lease for the Energea Corumbaiba Ltda property with an annual rent of
approximately $23,516 which will expire in January 2048. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
An
eighth lease for the Energea Divinopolis II Ltda property with an annual rent
of approximately $15,667 which will expire in March 2048. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
F-10
A
ninth lease for the Energea Micros I Ltda property with an annual rent of
approximately $17,945 which will expire in May 2048. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
A
tenth lease for the Energea Micros II Ltda property with an annual rent of
approximately $15,618 which will expire in February 2050. The monthly base rent
increases each lease year by the Brazilian Extended National Consumer Price
Index.
For
the projects under construction, the total land rental costs for the period
ended June 30, 2025 and December 31, 2024 were 82,450 and $214,403
respectively, which have been capitalized and included in CIP on the
accompanying consolidated balance sheets.
For
the operating projects, the total land rental expense for the six-month periods
ended June 30, 2025 and 2024 were $53,093 and $19,550 respectively, which have
been expensed on the accompanying consolidated statements of operations and
comprehensive loss.
The
lease costs and other required disclosure as of and for the period ended June
30, 2025 and December 31, 2024 are:
|
2025
|
|
2024
|
|
|
|
|
|
|
Operating lease cost
|
$ 375,366
|
|
$ 221,403
|
|
Cash paid for
amounts in the measurement of lease
|
|
|
|
|
liabilities - operating
cash flows from operating leases
|
$ 127,755
|
|
$ 234,236
|
|
Weighted-average
remaining lease term - operating leases
|
269
|
|
275
|
|
Weighted-average discount
rate - operating leases
|
17.90%
|
|
17.90%
|
In
March 2025, the Company derecognized right-of-use assets and lease liabilities
totaling $284,083, reflecting the net impact of early lease terminations for
Energea Formiga I Ltda, Energea Diamantina 2, and Energea Aparecida do Taboado
2 Ltda, additions of new leases for Energea Micros II Ltda and Energea Iguatama
II Ltda, and lease escalations on existing contracts. These changes affected
the operating lease cost for the period, which totaled $375,366, including
interest, amortization, and the net effect of lease modifications.
Future
lease payments, translated at the exchange rate in effect as of June 30, 2025,
are as follows:
|
2025
|
|
$ 91,297
|
|
2026
|
|
182,595
|
|
2027
|
|
182,595
|
|
2028
|
|
182,595
|
|
2029
|
|
182,595
|
|
2030
|
|
182,595
|
|
Thereafter
|
|
3,014,444
|
|
Total future
undiscounted lease payments
|
|
4,018,716
|
|
Less interest
|
|
(2,947,919)
|
|
Lease
liabilities
|
|
$ 1,070,797
|
Note 7 - Commitments
The
Company has two Engineering, Procurement and Construction ("EPC") contracts for
two of the projects with a combined total expected cost of $1,284,215. As of
June 30, 2025, $1,191,137 had been incurred under the EPC contracts.
F-11
Note 8 - Partners'
Equity
On June 03, 2025, the Company converted from a Delaware
limited liability company to a Delaware limited partnership and is now governed
by the Limited Partnership Agreement of Energea Portfolio 2 LP. This conversion
was undertaken to enhance structural flexibility for capital raising and
investor participation, including enabling the creation of additional classes
of investor shares, supporting the continuation of the ongoing Regulation A
offering, and aligning the entity's governance with its long-term growth
strategy. In connection with the conversion, the Company retained its election
to be treated as a C-corporation for U.S. federal income tax purposes. All
outstanding equity interests previously designated as common shares and Class A
investor shares were automatically converted into corresponding Common Shares
and Class A Investor Shares under the new partnership structure.
As of the date of this report, the Partnership has
authorized 2,501,000,000 limited partnership interests (the "Shares"). Of
these, 1,000,000 are designated as Common Shares, and 2,500,000,000 are
designated as Investor Shares. The Investor Shares, which represent limited
partnership interests, are further divided into various classes, as described
below.
Common Shares
The Partnership has authorized 1,000,000 Common Shares, all of which were
issued and outstanding as of June 30, 2025 and December 31, 2024. These shares
are held by Energea Global LLC, the General Partner, and represent its general
partnership interest in the Partnership.
Investor Shares
The Partnership has authorized 2,500,000,000 Investor Shares, all of which
represent limited partnership interests. Of this amount, 500,000,000 have been
designated as Class A Investor Shares. As of June 30, 2025 and December 31,
2024, 34,569,861 and 25,097,066 Class A Investor Shares, respectively, were
issued and outstanding.
The remaining 2,000,000,000 Investor Shares have been designated as Class B
Investor Shares, Class C Investor Shares, Class D Investor Shares, and Class I
Investor Shares. As of June 30, 2025, none of these additional classes of
Investor Shares were issued or outstanding.
All shares are uncertificated unless otherwise determined
by the General Partner and are governed by the rights, powers, and preferences
set forth in the applicable authorizing resolutions referenced in the Limited
Partnership Agreement.
F-12
Item 4.
Exhibits
Index to Exhibits and Description of Exhibits
|
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**
|
|
|
4.4**
|
|
|
6.1**
|
|
|
6.2**
|
|
|
6.3**
|
|
|
6.4**
|
|
|
6.5**
|
|
|
6.6**
|
|
|
9**
|
|
|
11.1**
|
|
|
11.2**
|
Consent of McCarter &
English (included in Exhibit 12)
|
|
12.1**
|
|
** Previously filed
Page 11
Signatures
Pursuant
to the requirements of Regulation A, the issuer has duly caused this report to
be signed on its
behalf
by the undersigned, thereunto duly authorized in the City of Chester, State of
Connecticut, on September 30, 2025.
Energea Portfolio 2 LP
By:
Energea Global LLC
By
/s/ MICHAEL SILVESTRINI
Name:
Michael Silvestrini
Title:
Co-Founder and Managing Partner
Pursuant
to the requirements of Regulation A, this report has been signed below by the
following persons
on
behalf of the issuer and in the capacities and on the dates 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:
September 30, 2025
Page 12